The Pursuit of Happiness

Mind, method and management are three words that can turn your vision into a reality. Mind, the mind is where it all starts… the vision, the belief and the planning. You must first make up your mind that you are going to achieve your objective. Then you need to have the proper mind-set before you can begin and successfully fulfill your objective. You must clearly see the end before you begin. You must believe you can succeed. You must plan in your mind. And you must think the thoughts that will move you in the direction you want to go and open the doors that need to be opened for you.

This poem by Henry Van Dyke provides valuable insight to how powerful our mind is:

Thoughts are Things

I hold it true that thoughts are things;
They’re endowed with bodies and breath and wings.
And we send them forth to fill
The world with good results, or ill.

That which we call our secret thought
Speeds forth to earth’s remotest spot,
Leaving its blessings or its woes
Like tracks behind it as it goes.

We build our future, thought by thought,
For good or ill, yet know it not.
Yet, so the universe is wrought.

Thought is another name for fate;
Choose then they destiny and wait,
For love brings love, and hate brings hate.

Method, the method is the process for implementing your plan. There is a path that leads to wherever you want to go in life. Find someone who has already walked this path to achieve what you want to achieve and deconstruct the steps they took to get there. Once you’ve deconstructed the steps back to where you currently are, you’re ready to begin your journey on those same steps.

Management, the management of two key resources, your time and your money, are essential to achieving your objectives. With the steps clearly defined, the journey will require an investment in yourself of time and money. But it usually doesn’t require time and money that you don’t have; it usually just requires better management of these two precious resources.

A few years ago when Utah was suffering a terrible drought, a state official made the comment that Utah doesn’t have a water shortage problem; Utah has a water management problem. This can apply to time and money. Most people don’t have a time and money shortage problem, they have a time and money management problem. By simply watching less TV in the evenings and saving money that is otherwise spent on unnecessary depreciating consumer goods, eating out, and other frivolous spending, most people have the time and money they need to change their lives.

Let’s apply the Mind, Method and Management principles to achieve financial independence:

First, make up your mind that you want financial independence. Commit to yourself that enjoying financial independence is the better use of your the time and money. Believe that you can achieve this objective.

Now determine the method by which you will achieve this vision. Investing in the stock market should be one of the methods to achieve financial independence. To be a successful investor requires specific knowledge, investing tools, and an investing system. Stock Investor has the training, tools and system.

Finally, you will need to manage both your time and money. Always keep this saying in mind: “When you say yes to one thing, you’re saying no to another.” Constantly ask yourself if the activity you’re involved in and how you’re spending your money is saying yes or no to financial independence.

To be a successful stock investor requires time to find and analyze stocks with the best money-making potential and to manage your portfolio. The good news is that the Stock Investor tools automate much of this process and require much less time than other trading platforms.

Investing also requires money. You will need to manage your spending so that you have more money to invest. Is an expensive car with big car payments more important than financial independence? This is the type of question you will want to ask yourself every time you make a purchase. Also, when trading, you need to manage your trades so that you can maximize your profits and minimize your losses. Learning and applying proper money management rules for trading are essential to becoming a successful trader.

These three simple words, mind, method and management, contain the keys to achieving whatever it is you want to achieve in life… including financial independence.

Your Friend,

D. Scott Elder

“The Secret gives you anything you want: happiness, health, and wealth.”
– Bob Proctor, Philosopher, Author, and Personal Coach

…or does The Secret give you false expectations? The answer is: “it depends.” Most everyone is familiar with the mega hit DVD and best selling book, “The Secret.” If you’re not, go to www.thesecret.tv to learn more.

The basic premise of the secret is “the law of attraction.” This is, that which you think about you will attract into your life. Think positive thoughts and you’ll attract positive into your life. Think negative thoughts and you’ll attract negative into your life. The basic premise is sound.

So when I recently was told by a friend, Dave Blanchard, that The Secret has done more harm than good, I was a bit surprised. Dave is the CEO of the Og Mandino Group which teaches people how to live successful and abundant lives through the teachings and principles of Og Mandino www.ogmandino.com

The problem that Dave shared with me is that only about 3 percent of the population knows how to properly visualize and correctly implement the law of attraction. The other 97 percent think they’re visualizing but in reality they’re fantasizing. These people end up spending their lives in frustration because “this stuff doesn’t work.”

There is a big difference between visualizing and fantasizing. A person who visualizes knows that effort is required to turn a mental picture into a reality. A person who fantasizes thinks about having whatever it is they want but put little or no effort towards obtaining it. They think that by sitting around watching TV at night, that checks will start coming in the mail instead of bills; that their old car will magically change into a new car; and that they’ll wake up one morning in the home of their dreams. That is fantasizing.

Here’s an example of how visualization and the law of attraction has worked in my life. Many years ago I received a sweepstakes postcard in the mail. It had a picture of a cabin in the mountains. The caption read: “Scott, is this your dream cabin?” With a red felt tip marker I wrote under the caption “YES!” I kept that postcard sitting on my desk at home and would look at it every evening when I went into my office to work new business ideas and preparing myself for success.

Having a cabin for my family to spend time together was part of my bigger vision of providing a better quality of life for my family. It’s what helped me to discipline myself to read books, listen to audiotapes and watch videos on self-improvement and work on ideas for new business ventures rather than do time-wasting activities such as watching TV at night.

When one of my earlier business ventures started doing well, the first thing I did was look for property in the mountains that fit my vision of where I wanted to build a cabin. Within days of telling myself that I was ready to buy cabin property, I saw an ad in a local magazine advertising mountain property for cabins. I made an appointment with a sales person. He showed me many lots that didn’t fit my vision. When I told him what I was looking for he said he knew of a piece of property that had just come available in a different development that had been sold out for years. The minute I saw this property I knew it was what I was looking for and bought it.

I didn’t have enough money to build the cabin yet, but I had the most important element, the property to build it on. And although it took several more years to finally build the cabin of my dreams… which by the way ended up being much nicer than the cabin on the postcard, I did turn my vision into reality.

A person fantasizing about having a cabin might have a picture of it in his mind, and even may see his family roasting marshmallows in the fireplace on Christmas Eve while the snow gently falls outside. But if he puts no effort into achieving this dream, just sits around every night watching T.V., it’s not going to happen.

You can know if the picture in your mind is a vision or a fantasy by the amount of effort you’re putting in to make it a reality. Little or no effort… then it’s a fantasy and it’s not going to happen. There must be movement and effort for “The Secret”, the law of attraction, to work.

Next week I’ll share with you the three word secret to turn a vision into reality.

Your Friend,

D. Scott Elder

“No Man is Rich Enough to Buy Back His Past.”
– Oscar Wilde

Each of us has said or done something that we regret. One regret that many people have as they approach their retirement age is that they wish they had invested more money when they were younger. You don’t have to have this regret. If you’re not already investing in the stock market, start now. If not now, when? The last thing you want to do is get down the road a few more years and have an anxiety attack because you don’t have enough money to retire. You may be able to keep the job you have, or find another job, and never really retire. But what fun would that be?

Now is the time to look ahead in your life and determine what regrets you could have. Now come back to the present and decide what actions you can take to not have these regrets. If one these regrets is not having prepared for retirement sooner, then now is the time to build your retirement nest egg.

With the Stock Investor software and the 3-Step Investing Process you have what you need to build wealth and become rich enough that you won’t need to buy back your past. Well, at least not for the reason of regretting not investing enough to enjoy a financially rich retirement.

Your Friend,

D. Scott Elder

“Energy and Persistence Conquer All Things.”
– Benjamin Franklin

Procrastination is an enemy to building wealth. It’s too easy to put off working your brain and resting your body at the end of a long day at work or taking care of the house and kids all day. But then days turn to weeks, weeks turn to months and months turn to years. And before you know it you’re seeing your retirement years quickly approaching on the horizon. Will your retirement be coming in a luxury cruise ship bringing travel, leisure and financial security? Or will it be a rubber raft with oars, requiring you to continue rowing through your retirement in order to keep afloat on the waves of life? Or perhaps it’s something in between.

Whatever ship, boat, or raft you end up boarding when your retirement arrives, it will be of your choosing. But the choice won’t be made at the day of your retirement… or even 10 years before your retirement. It will be made daily. You’ve already been making the choice and each day you continue to choose how your retirement will be. What kind of retirement you have will be the result of the choices you make each day compounded over weeks, months and years.

It takes “energy and persistence” to conquer procrastination; your enemy to building wealth and an early and rich retirement. Your desire to enjoy a retirement of leisure and financial security can be your fuel. Each day make the choice to use your Stock Investor software to go through the 3-Step Investing Process. Persist in doing your searches, research and portfolio management on a daily basis and you will end up on the luxury cruise ship of retirement.

Your Friend,

D. Scott Elder

“Formal education will make you a living; self education will make you a fortune.”
– Jim Rohn

Colleges and Universities are good places to learn about a lot of things. And a lot of what you learn can help you make a good living. But the one thing that these institutions of higher learning are not good at teaching is how to build wealth… real wealth.

Wealth-building skills are usually learned on your own. They can be learned through self-learning programs, in seminars, in workshops and through one-on-one mentoring from an expert or coach. These skills usually involve leveraging and compounding your money in some fashion. Common ways to do this is starting your own business, investing in real estate and investing in the stock market.

Most people consider anything that involves leveraging money as risky. Risk is a relevant concept. The amount of risk involved in any venture can be inversely proportionate to the amount of knowledge you have regarding the venture. The more you know about the venture, the less risky it is. For you, building a hotel and casino costing several hundred million dollars would be a huge risk. For Donald Trump it’s not… he knows the hotel and casino business. For you, trading calendar spread options may be a big risk. For Ross it’s not… he’s an expert options trader. But neither one was born with the knowledge and expertise they each now possess. And neither one learned these skills in college. They both learned these wealth-building skills on their own and from others who possessed the expertise they wished to acquire.

Recently a friend, whom I’ve known for many years, said to me “It’s been fun watching your success grow over the years. I wish I were a risk-taker, but I’m not so I’ll never be as successful as you.” I told him I wasn’t a risk-taker. Actually, I am extremely conservative and risk-adverse. I told him the only thing I risked was my time. We all have the same number of hours in a day. I determined how many of them I needed for sleeping, eating and family and used the rest to learn how to build a successful business and invest in the stock market. I then told him that anyone can do it… I’m living proof. I don’t think he liked my response because it put the burden of responsibility and accountability squarely on him.

I have a Bachelors degree from a top University. I also have an MBA. So I can speak from personal experience. My formal education could have made me a nice living. But I chose to add to it self-education through home-study programs, seminars, workshops and mentors to learn how to build wealth. Here’s something else I learned, and for you to consider: My formal education cost a lot more than my self education. I’m getting a much higher return on my investment in self education. You can do the same. You can build wealth investing in the stock market. The more you learn about investing, the less risky it will be for you and the more successful you’ll become. It’s really that easy.

Your Friend,

D. Scott Elder

The soul attracts that which it secretly harbors;
that which it loves, and also that which it fears.
– James Allen: writer and poet

By now most people have seen or heard of the The Secret which was original released as a video and his now a book. The basic premise of The Secret is the concept of the Law of Attraction. The Law of Attraction states that we attract into our lives that which we think about, whether it be positive or negative; we create the events and the conditions of the world in which we live in.

This is not a new concept. Many of today’s success philosophies have come from the Bible, James Allen’s As a Man Thinketh, and Napoleon Hill’s classic, Think and Grow Rich. In fact, Allen’s title came from the passage in the Bible, “As a man thinketh in his heart, so is he.” (Proverbs 23:7).

Allen wrote As a Man Thinketh around 1904 and Hill wrote Think and Grow Rich in 1937. This philosophy of success, that we attract into our lives that which we think about and desire in our hearts, has been around for a long time. It just continues to be repackaged and delivered by more charismatic success gurus.

It’s really a simple, yet powerful and effective, principle that doesn’t require you to spend thousands of dollars to learn and apply in your life. Nightingale Conant has an excellent Napoleon Hill program for under $40.00.

If you learn and apply the principles in this program, your life will change.

Your Friend,

D. Scott Elder

“Happiness is not a reward – it’s a consequence.”
– Robert Green Ingersoll

When speaking to youth groups, I like to ask the question, “Wouldn’t it be nice if you had a crystal ball to see your future?” The response is overwhelmingly yes and nodding heads. Then I tell them that we do have crystal balls. People are crystal balls. Every person who has ever lived and is now living is a crystal ball that you can use to see your future.

Do you want to be a good father, mother, husband, or wife? Do you want to be financially successful? Do you want to be happy? Find someone who is close to your ideal in any area of life you would like to achieve and simply model them. Learn their values. Find out what books they read. How do they spend their free time?

Many years ago I did training videos for an exercise equipment company. During a videotaping at their manufacturing facility I was taken into a “top secret” room. This room was filled with tables, each one with a competitors products disassembled and the parts neatly arrayed. This is called reverse engineering, which is part of R&D, research and development.

Just as you can reverse engineer a product to see how it’s made, you can reverse engineer a person’s life. You can research the positive qualities and then develop them within yourself. Success in any area of life is a consequence of proper actions. Failure in any area of life is a consequence of poor, or no actions.

In 1997 I decided that I wanted to learn how to make money in the stock market in order to build my retirement account. I started looking for someone who was making money trading stocks who could teach me. In a conversation with a friend, Ross Jardine, I learned that he was a former broker and was successfully trading his own money using online tools and a discount broker. Ross taught me how to trade. It was such a blessing in my life that I wanted to teach others what Ross taught me. During the past 10 years we have taught thousands of people throughout the world how to make money trading stocks.

There is no question that the tools and training we provide work. The only question is will you take the proper action to make them work? Success and happiness in life are not accidents, they’re consequences.

Your Friend in Investing,

D. Scott Elder

“Fear is not an American art.”
– Thomas Jefferson, 1775

From the journal of Thomas Jefferson:

“On the 15th of May, 1776, the convention of Virginia instructed their delegates in Congress to propose to that body to declare the colonies independent of Great Britain, and appointed a committee to prepare a declaration of rights and plan of government.”

“The committee for drawing the declaration of independence desired me to do it. It was accordingly done, and being approved by them, I reported to the house on Friday the 28th of June when it was read and ordered to lie on the table.”

“On Monday, the 1st of July the house resolved itself into a committee of the whole and resumed the consideration of the original motion by the delegates of Virginia.”

“Congress proceeded the same day to consider the declaration of independence which had been reported and lain upon the table on Friday, and on Monday referred to a committee of the whole.”

“The debates having taken up the greater parts of the 2nd, 3rd, and 4th days of July were, in the evening of the last, closed the declaration was reported by the committee, agreed to by the house and signed by every member present except Mr. Dickinson.”

From the Declaration of Independence:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.

The reason I’ve titled my blog “The Pursuit of Happiness” is because we all share in common the desire to be happy. This desire for happiness is so powerful that we’re willing to give our lives in order to achieve it. It is my desire to help you in your pursuit happiness.

The Declaration of Independence goes on to state:

The history of the present King of Great Britain is a history of repeated injuries and usurptions, all having in direct object the establishment of an absolute Tyranny over these States. To prove this, let Facts be submitted to a candid world.

The document goes on to list the offenses by the King of Great Britain against the 13 colonies as justification for seeking independence. Similarly, each one of us has tyrannies in our lives. But instead of being inflicted upon us by a king, the tyrant that oppress us is psychological. This psychological tyrant is our limiting beliefs. These “emotional tyrannies” impede our personal pursuit of happiness.

It is time for you to declare your personal “Declaration of Independence” from this psychological tyrant… from your limiting beliefs. You can personalize our country’s Declaration of Independence to state:

The history of my limiting beliefs is a history of repeated injuries and usurptions, all having in direct object the establishment of an absolute Tyranny over me. To prove this, let the Facts be submitted to a candid world.

Now list everything that your limiting beliefs have kept you from achieving throughout your life. Here’s an example:

My limiting beliefs have..

…kept me from excelling in school
…kept me from excelling in sports
…kept me from excelling in business
…kept me from achieving financial independence
…kept me from enjoying fulfilling relationships with family
…kept me from enjoying strong relationships with friends
…kept me from completing things that I start
…kept me from trying new things
…kept me from… (you fill in the blanks)

And now, declare your independence from your limiting beliefs so that you can pursue the happiness that is your unalienable right.

Your Friend,

D. Scott Elder

“Good luck at Cyber-Investing. Let’s bring it to the masses!”
–David Brown, author of Cyber-Investing,
written in Scott Elder’s autographed copy of Cyber-Investing

In my last post, I left off with:

“We didn’t want to do things the same way we had with our previous company. Starting fresh we had the advantage of being able to ask ourselves, if we were to start this company again today, what would we do different?”

Teaching people how to invest in the stock market through seminars and workshops is a very expensive and risky business. Here’s a “behind the scenes” look at how this business model works:

1. Pick a city to go to and launch a marketing campaign using direct mail and radio and newspaper advertising to invite people to attend a free seminar. A free gift is usually offered for attending.

2. Book a hotel meeting room and the sleeping rooms and airline flights for the instructor and the support team to put on the free seminar.

3. Hold two free seminars a day for three days, typically Tuesday, Wednesday and Thursday.

4. The seminar is a 90 minute overview of the investing tools. The objective is to present the features and benefits of the tools and then invite the seminar attendees to register for a more comprehensive two-day workshop.

5. Over the course of the three days of free seminars you hope to see at least 600 people and get 60 to 90 of them to pay $3,000 tuition to attend a workshop.

6. Book a hotel meeting room and sleeping rooms and airline flights for the workshop instructors and support team to teach the workshop.

7. Hold the two-day workshop, which is typically on a Friday and Saturday.

When you do the math on the gross income, on the surface it looks like a good money-making model. But it’s not. The marketing costs, hotel costs, airfare costs and personnel costs to do the free seminars and fulfill the workshop is extremely expensive.

The risks in the seminar business are huge. Sometimes only a few hundred people show up to the free seminars with only 20 to 30 registering to attend the workshop. Severe weather the week of the free seminars will keep people from attending. When the terrorist attacks on 9/11 shut down all flights, getting the instructors and support teams to the seminars and workshops became a logistical nightmare. They had to drive rental cars across country non-stop to put on the events; which very few people turned out for.

In this business, uncontrollable and unforeseeable circumstances can bankrupt you. From the time we started the company until the time we left, there had been a significant increase in advertising costs, hotel rates and airfare costs. Also during this time several other stock investing education companies started up. Too many companies offering similar programs caused the attendance to the seminars and workshops to decrease significantly.

With the costs increasing and attendance decreasing, Ross and I did not want to start another company that used seminars and workshops to teach people how to invest in the stock market. But we still wanted to continue teaching this valuable, and life-changing, skill to people.

David Brown had always had a concern that because of the tuition cost to attend a workshop, many people who wanted this training were not getting it. This tuition barrier kept thousands of people who were attending our free seminars from learning how to invest using our tools and our training. David wanted us to “take it to the masses,” which is why he wrote that in the Cyber-Investing book that he autographed and gave me.

The reality is that you can’t take it to the masses in the seminar and workshop model because of the huge costs involved. It’s simple economics… a business has to bring in more money than it puts out or the business will cease to exist. It doesn’t matter how much you want to provide this opportunity to as many people as you can because you know it will help them; to continue in business you need to make a profit on your services. As Stephen Covey put it: “No Margin, no mission.”

With Stock Investor Ross and I decided to do a test based on the feedback we were getting from the attendees of our free seminars who didn’t register to attend our workshops. 85 to 90 percent of the people who attended the seminars didn’t attend the workshops. But almost all of them were interested in using our investing tools. We know this because when people left the seminars they would tell us so. Over and over again we kept hearing the same thing, that basically included these statements:

1. I don’t want to attend your workshop but I want to use your investing tool.

2. Just let me pay the subscription fee and I’ll figure how to use it on my own.

We would tell people that we can’t do that because we felt strongly that they wouldn’t be able to figure it out on their own and that our customer service people would end up giving them a workshop over the phone. A subscription fee for the use of the investing tool does not cover the expenses of providing training over the phone. This model would also bankrupt a company in no time.

Based on what we were hearing we decided to provide three levels of participation with Stock Investor:

Level 1: The Stock Investor Tool Kit. A free 30-day trial to the investing software and training and support materials available for free at the Stock Investor website.

Level 2: The Stock Investor Success Kit. A complete 6 hour workshop from Ross on DVD with a comprehensive workbook and additional support materials at the Stock Investor website.

Level 3: One-on-one Personal Coaching sessions that are designed to shorten the learning curve, reduce mistakes made through trial and error, and get the student on the fast-track to successful trading.

Here’s what we’ve learned. Although we’ve “taken it to the masses” with the free trial opportunity, the fact is that what we were telling people before has proven true: a majority of the people will not take the time to go through the support materials and training available on our website and figure it out on their own. In addition to getting the program for a free trial, most free trial users also want free training over the phone. This simply is not economically feasible.

If a free trial user determines that they’re not willing to use the free self-directed training available at the Stock Investor website then they’re really not a candidate for that level of participation.

The Success Kit is a comprehensive training program. It features detailed step-by-step instruction, easy-to-follow visuals, and a companion workbook that follows the DVD training. It is literally a workshop on DVD. It’s comparable instruction to what people used to pay $3,000 for to attend one of Ross’ workshops.

I know that if a person were to simply “eat the elephant one bite at a time” and start with DVD 1 and work their way through the training, they will have a good understanding of the 3-Step Investing process and be proficient at using the Stock Investor software to make money trading stocks.

The Success Kit is a self-directed training program. It’s an opportunity to get everything you need to learn how to make money trading stocks at a fraction of the cost of attending a live workshop.

But some people are not wired to be self-directed learners. It takes time and discipline. It is much easier to have an experienced instructor teach you. We know that; which is why we strongly recommend Tool Kit trial users and Success Kit buyers to consider our Personal Coaching program. This is where you get one-on-one training over the phone with an experienced trader who is a certified coach on the Stock Investor software and 3-Step Investing Process.

The personal coaching sessions are structured training sessions. They are adjusted to fit your level of experience. With a personal coach you have the advantage of getting feedback and how you’re doing. You are given assignments that your coach evaluates in order to determine whether or not you’re understanding what you’re being taught.

Even though the personal coaching option costs more than the free Tool Kit option and the Success Kit option, it’s actually a better value. The reason is that you can get a quicker return on your investment working with a personal coaching. This is because coaching students are more inclined to actually trade and they have more wins and fewer losses because of the personalized training.

Here’s what a recent coaching student sent us:

“I wish to extend a whole-hearted thanks to the Stock Investor company, especially the personal coaching program for providing me with an understanding and education in the complicated and intimidating world of stock options. Your simple and straightforward step by step approach to education, and powerful software has enabled me to trade with confidence that I can achieve remarkable profits with limited risk [in the first two months of trading options I have realized a gain of almost 20%]. I intend to pursue trading as a second career and bring me to a level of financial security and independence I never thought possible.”
–Peter F.

The reason Ross and I started Stock Investor was to provide the opportunity for as many people as possible to enjoy the financial rewards and benefits that come from being a successful stock and options trader. Just as it changed my life more than 10 years ago, it has changed the lives of thousands of others throughout the world since then. And it can change your life as well.

We truly want to take this opportunity to the masses, and we’ve done so by offering three different levels of involvement: the free Tool Kit; the Success Kit for under $400; and Personal Coaching. Each level has its own corresponding level of training and support. Compared to other similar programs, we are confident that we provide extremely high value for the investment at each of the three levels.

Although it’s common for people to start out with the lower priced levels, we know that you get the most benefit from working with a personal coach. Our intent is not to force people into any of the three options, but merely to make them all available. And we’re not hiding the fact that we know that most people are not accustomed to putting themselves through a self-directed learning program… even if everything they need to succeed is at their fingertips.

Your Friend in Investing,

D. Scott Elder

“Do we rescue Telescan or build a new investing
website with another financial data provider?”
— D. Scott Elder to Ross Jardine in 2000

Online Investors Advantage went from doing one workshop a month, to two a month, to one a week, and eventually to as many as six workshops a week throughout the world. The U.S. stock market is the global stock market and the World Wide Web really is world wide. We were filling workshops in the United States, Canada, Australia, New Zealand, England, Scotland, Singapore, South Africa and even Dubai.

By the way, I enjoyed going to Dubai. The country is clean and beautiful and the people are very friendly. I haven’t been back since 9/11 but if I had a reason and the opportunity I would not hesitate. I fell in love with Australia. If I’d gone there when I was single or when I had a young family I would have been tempted to move there. The people are very friendly (they love Americans) and the weather is perfect. In the same day you can scuba dive in the beautiful ocean reefs and then go for an ATV ride in the rain forest mountains teaming with Kangaroos. I’ve taken my family there to enjoy Christmas in the summer on the beach. The New Year’s Eve fireworks at Sydney Harbor are spectacular.

But I digress. Our rapid growth was noticed by a small publicly held Internet holding company. This was right before the infamous “.com crash.” when Internet holding companies had experienced huge growth and tremendous run up of their stock. This looked like an opportunity to be part of something big so we became a wholly owned subsidiary of this company. Shortly after the acquisition of OIA, Internet stocks fell out of favor and the value of our parent company collapsed. The other subsidiaries were struggling to pay their leases, make payments on their lines of credit and meet payroll.

OIA was still doing well so it ended up supporting the parent company and most of the other subsidiaries as well. Ross and I went to work to divest of the subsidiaries that were draining OIA’s resources and we eventually got the company to where OIA was the only subsidiary left in the holding company. But even with no debt and no long-term liabilities the market cap (value) of the parent company was less than the cash that OIA had in the bank. That’s how crazy things got. I also ended up becoming CEO and Chairman of the parent company. This is not a fun position for someone who likes to be the “behind the scenes” creative guy and needs to be a little less structured than a typical CEO of a public company.

Just as we were cleaning up things inside the parent company, the .com crash created another challenge for us. The company that owned Wall Street City, Telescan, Inc., was also suffering the effects of the .com crash. By this time we had grown to the point where we were able to have Telescan build us a customized version of Wall Street City called Investors Toolbox. We stripped out all of the banner ads, formatted the web site so that the 5-Step Investing Formula flowed in a natural progression and automated many of the functions in each of the five steps.

Telescan had been built on a banner ad revenue-generating model (as most Internet companies were at the time). With this model, in order to attract “eyeballs” to attract advertisers, they had a free version of Wall Street City and a minimal subscription fee for the premium services. When the banner ad revenues started evaporating, Telescan started losing money at an accelerating rate. At the same time, Wall Street City’s subscriptions were also declining. The irony was that a subscription to Investor Toolbox was more than a subscription to Wall Street City and the Investor Toolbox subscriptions were increasing.

This dynamic proved to be a valuable insight. We learned that the things we did to customize our version of Wall Street City and educating subscribers on how to use the tools made it much easier to use; and consequently easier for them to get a return on their investment in the subscription fees. In other words people were willing to pay more to use our version because it was easier to make money trading stocks with it.

Telescan was on the verge of bankruptcy and we had to make a decision: either merge with Telescan and assume its liabilities or find another provider of financial data and rebuild Investor Toolbox from the ground up. Rebuilding the website would have been the least expensive alternative but the disruption to our business and our subscribers could have been disastrous for the company. The decision was made to merge with Telescan and assume its liabilities.

I was anxious to get back to focusing on the creative aspects of the company and was glad to let the CEO of Telescan become the CEO of the newly merged companies. He had a Wall Street banking background and much more experience running public companies than I did. Shortly after the merger the company changed its name.

Soon after the merger the vision that Ross and I had for the company and the vision the new CEO had began to diverge. Within a few months Ross and I left the company and pursued other interests. But the fact that we didn’t achieve some of the objectives we had when we started OIA kept rolling around in the back of our minds. So about two years after we left we decided to start another company to teach people how to use proprietary stock trading tools to invest in the stock market.

We didn’t want to do things the same way we had with our previous company. Starting fresh we had the advantage of being able to ask ourselves, “If we were to start this company again today, what would we do different?”

Continued on next post…

Your Friend in Investing,

D. Scott Elder