I firmly believe, I can make a positive contribution to your life by sharing both my knowledge and the ready-to-use stock picks of the FALCON Method.
Investing was my most expensive hobby (until I figured out how to do it right)
I firmly believe, I can make a positive contribution to your life by sharing both my knowledge and the ready-to-use stock picks of the FALCON Method.
When I started out in investing (in my 20s), I was nothing special…
I had no confidence, no extra knowledge, just a burning desire to get my money to work and produce passive income.
So that I could finally leave the job I didn’t like…
The job… that was apparently to run MY OWN company, I co-founded with a friend.
I have to say that quitting your own company is not the easiest of things when there are co-owners, employees, and plenty of responsibilities.
I felt trapped…
Money was pouring in nicely, but I wasn’t enjoying what I was doing and didn’t feel I was getting any closer to my childhood dream of achieving financial freedom.
The reason? I couldn’t properly manage the “get my money to work” part of the equation.
Put simply: I was a BAD investor, and I had to learn some lessons the hard way…
What made me invest in the first place?
I grew up in a small town in Hungary (Central Europe), in a lower-middle-class concrete jungle.
My parents got divorced when I was around ten. I stayed with my mother, and we were living paycheck-to-paycheck, while my father became a very successful entrepreneur through hard work.
Experiencing this stark contrast – my mother’s low standard of living and my father’s wealth – I decided early on that I wanted to make a lot of money, for which I was willing to work my socks off.
My ultimate goal, however, was to get that money working for me so that I could live off of passive income instead of a life-long grind that permanently erased the smile from my father’s face.
This experience turned me into a serial entrepreneur, which I considered the best way to accumulate capital for investing.
I established and sold my first company by the age of 24, and more of the same “building and selling” processes followed afterward. I benefited immensely from having built companies from scratch. This is an advantage even Warren Buffett refers to, but many investors do not have.
“I am a better investor because I am a businessman, and a better businessman because I am an investor.” (Warren Buffett)
During my early investing “career,” I have learned four main lessons I would like to pass on to you so that you can spare some time and money…
Lesson #1: A fool and his money are soon parted
To put it in a more sophisticated manner, your financial status and level of knowledge always converge.
I was a guy with a relatively low level of investment knowledge and a high amount of money to put to work as a result of my entrepreneurial success. Since getting my knowledge level up was not a short process, but the money part of this equation could move much faster, the result was that I had lost plenty of money with various investments during the years I was building up my knowledge.
The balance of my investment “account” was quickly moving downhill while my knowledge level was slowly climbing upwards… until these two finally met somewhere in the middle.
Believe me, this was a painful experience, and it lasted for a couple of years.
Here are some examples of my horrendous investments just for the sake of amusement.
- I invested in exotic property (a hotel in Thailand, to be more exact, that was really hard to sell),
- a sheep farm (resulting in a lengthy lawsuit),
- forex robots (all of which lost money),
- some outright Ponzi-schemes (most of the perpetrators went to jail),
- startup companies (with dishonest partners),
- and stocks of disastrous public companies.
Now you have a feeling of what I meant by saying, “investing was my most expensive hobby.”
My journey to success was very long, painful, and expensive. (Hint: yours shouldn’t be!)
The wake-up call
At some point, I found an investment newsletter many people were raving about. Its title even included the magic word “dividend,” and I thought my savior arrived: a guy who knows how to pick stocks that would provide the passive income I so desire.
I subscribed to his newsletter, and at first, I felt somewhat uncomfortable with his recommendations. By this point, I had read tons of investment books, but I was very far from coming up with my own system, so I just suppressed my feelings and followed this “expert.”
One of the stocks he got me to buy was Transocean (RIG).
I never really understood his reasons behind this purchase since this didn’t look like a safe dividend stock to me, and he was very secretive about his stock-picking method. (That’s why I am really open about mine!)
Long story short: the company stopped paying dividends, and the share price fell from $38 (where I bought) to single digits. That really hurt! This was the wake-up call I needed.
I started thinking. (Better late than never…) What do all my failed investments have in common?
In most cases, I totally gave up control and didn’t fully understand how these investments worked and could make money. All the guys selling these investments were sales and marketing superheroes; their confidence seemed to be sky-high (compared to mine at that time), but the actual results I got were woeful.
Of course, the newsletter guy kept smiling, dusted himself off, and went on to get new subscribers to fill the void left by the ones whose financial lives he managed to ruin.
Following his recommendations was very stressful for me since I didn’t understand the underlying logic; thus, I didn’t have a conviction about any of the stocks that landed in my portfolio.
Can you imagine how you’d feel if one of your stocks fell by 80% and you knew nothing about the company?
Lesson #2: Giving up control over your money never works.
Do you notice the pattern I’ve followed?
I tried to escape the responsibility of managing my own money as I found it stressful.
What I got in return were more stress and dreadful results.
Successful people take responsibility and want control.
Lesson #3: Never invest in anything you do not fully understand!
Keep asking…
If you do not get the answers that make you comfortable with the decision, have the confidence to say no and walk away.
Looking back, even in my late 20s, I knew much more than most people on the other side of my failed investment stories, yet my lack of confidence let them walk away with my money.
Lesson #4: Is it a system, a structured process, or just some fancy marketing?
Selling an investment to someone who is not an experienced investor is easy. A guy with no integrity can always come up with a story that sells.
But here’s the catch: can that person describe what structured thought process, what kind of system led him to the investment opportunity he is proposing?
“If you can’t describe what you are doing as a process, you don’t know what you’re doing.” W. Edwards Deming
Only invest if there is an underlying process you can fully understand. If you keep asking and really want to discover an investment system, only the honest guys will keep answering. All the get-rich-quick salesmen will rather go for the easy money and yell: “Next, please!”
You most certainly don’t want to be that “next” person.
Learn from my mistakes, save years of agony and plenty of money by having the confidence to only invest in something you understand, or better yet: follow a well-structured investment process instead of blindly trusting the sales guys out there.
By the way, I am very determined to help you understand my process; that’s why I am giving you a very high-level training about stock selection for free. (Click the link for more information!)
Understanding leads to peace of mind, and this is crucial for both your long-term results and your quality of life.
On my way
To make a change, I decided to attend Tony Robbins’ Unleash the Power Within (UPW) event in London, which tore me out of my miserable situation.
When I got home, I started blogging about dividend-focused stock investing (which was my preferred approach around that time), and I discovered that writing (and later teaching) forced me to think at a deeper level and thus get better and better.
One of the happiest and most liberating days of my life was when I put down my general manager, managing director, and board membership positions, all at once, a few short months after the UPW event. They would surely look impressive on a business card today, but those are not what makes me who I am; I don’t identify with titles anymore.
Switching to the “do what you love, and money will follow” approach has changed my life.
After relinquishing my corporate roles, I could devote all my time to my field of passion, which was stock investing.
I was devouring books on stocks, bonds, and all kinds of investments. The last time I checked, I had 400+ books on my “read, highlighted, and took notes” list, and most of these were on stock investing.
(If you apply the simple but roughly accurate estimate of “one book per week,” you can calculate how many years it took me to get to this level. And I’m still an avid reader…)
Dividend investing provided a safe playing field
I started out focusing on stocks that produced reliable and growing dividends.
Knowing what I know now, I’d say that this group of stocks provided a safe playing field… but after I dug deeper, I realized that income-focused investing delivers subpar returns.
Yes, some guys keep showcasing “proof” of the opposite, so you may want to read this article to get things straight.
I was 32 when one of my friends asked me why I was not teaching people how to do “this dividend thing.” I thought nobody was interested, but he insisted that if I committed to creating a seminar on dividend investing, he would get me the first attendants.
Long story short: my friend was right, people do want to know how to break out of the rat race, and less than a decade later, I have managed to get my message across to tens of thousands in 33 countries with my best-selling books and online courses.
The FALCON Method is born
I got an invitation to speak at a financial conference in 2016, where people from the audience flocked to me after the presentation and were so enthusiastic that they kept asking questions for more than an hour (in the lunch break of the event).
The only question I could not answer back then sounded like this:
“Couldn’t you just share with us the list of stocks you think present the best investment opportunities? Not everyone would like to put in the same amount of work you did, but your process really looks well-built and logical, so we would surely use its results if possible!”
This is how the FALCON Method Newsletter monthly newsletter service was born.
Up until its birth, I was driving full throttle with my eyes closed: making enormous effort to teach my way of investing to as many people as possible, but I failed to realize that most of them only wanted to understand the underlying thought process and once they were convinced that my approach should work, they wanted me to manage their money or at least help them with the stock selection.
The newsletter service is as close to this desired solution as possible, and it is more than affordable to all the people who trust the underlying stock selection process.
The next level
Did you notice that I hadn’t even shared the Amazon link of my FALCON Method book above?
For a good reason…
The FALCON Method was initially based on the exact same income-focused, evidence-based stock selection process that I used to achieve financial freedom. (After all those wild investing adventures I shared.)
But learning never stops…
I have come a long way since the newsletter’s launch and the book’s publication.
Although I still consider the dividend an important component of the total return formula, today, I’m taking a much deeper look at the companies I invest in, as you can read in this article.
My evolution was supported by the fact that the FALCON Method business grew so big that we could afford institutional-level data, and I got direct access to some renowned investors.
As a result, the current stock selection process is much better and more multifaceted than the one that made me financially free.
And so until I write a new book that meets the standards I have today, I will not recommend you to buy my book. The good news is: until then, you can access my best content for free on this webpage.
(Value investing, dividend investing, the best value indicator (EVA), my whole process, free investing webinar here! )
Whenever I have the chance to make my service incrementally better, I jump on it. That’s a life philosophy well captured in Leonard Lauder’s following quote:
“I learned early that being a perfectionist and providing quality was the only way to do business.” (Leonard Lauder, son of Estée Lauder’s founders)
Today, we are using top-quality data that remedies the distortions of GAAP accounting. (Did you know that accounting rules treat shareholders’ capital as free money? And this is just one of the outrageous shortcomings of financial statements that most people trust with their eyes closed.)
I wholeheartedly agree with Warren Buffett, who says that “managers and investors alike must understand that accounting numbers are the beginning, not the end, of business valuation.”
GAAP accounting doesn’t give you a true picture on business performance. The book that propelled my enlightenment was “Best‑Practice EVA” by Bennett Stewart.
(Interested? Don’t expect an easy read! You may want to check out my article on EVA first.)
EVA stands for Economic Value Added, and simply put, it’s the company’s real profit after correcting for all accounting distortions and applying the true cost of capital to all the money used by the business. This pricey institutional-level data is my choice when it comes to analyzing companies from a long-term owner’s (real investor’s) perspective.
Whoever still makes investment decisions based on reported earnings numbers can easily fall victim to the “garbage in, garbage out” syndrome. You can be smart, but if your input data is of poor quality, your decisions will also be far from well-founded.
One single promise
When founding the FALCON Method company, I made one single promise:
The service will always reflect the best of my knowledge, so it must develop continuously as I keep learning.
I attended Columbia Business School’s Value Investing and Advanced Value Investing courses, bombarded the EVA guys at Institutional Shareholder Services with tons of questions, and kept devouring books on stock investing, which all shaped how the FALCON Method is built today.
No investor should consider himself a finished article, so keeping up the enthusiasm for learning and getting better is vital.
It feels like a quantum leap, but the message is clear
Before founding the FALCON Method, I didn’t enjoy the daily grind for money, not even at the company I co-founded.
These days money is just the byproduct of what I love doing, and it seems the more people I help, the more cash lands on my account.
Investing was a very expensive hobby until I figured out how to do it right. If I had to summarize most of what I learned, I would go with the following:
- Do not try to escape the responsibility of managing your own money. The moment you relinquish control, you are doomed to failure.
- Only invest in something you understand, and have the confidence to walk away.
- If there is no structured decision-making process behind an investment, you are most likely buying a glittering piece of salesmanship.
My investment results started to become consistently good after I could clearly describe what I was doing as a structured process. These days I invest my money in an evidence-based way, based on institutional-level data, with the odds of success on my side. It feels like a quantum leap from my initial faltering.
That said, my current approach has been shaped by hundreds of books and several years of experience. Please take your time, understand how the FALCON Method works, and once you think that you could consistently follow this investment system in the long run, I’ll be happy to welcome you on board.
With some help, anybody can achieve what I’ve done!
Quick facts:
- Name: David Solyomi
- Born: 1982, Hungary
- Living: Budapest, Hungary
- Education: economist (specialized on corporate finance)
- Experience: equity analyst, financial journalist, serial entrepreneur, investor, author of a best-selling book on investing, instructor, public speaker
- Hobbies: travelling, triathlon, reading, investing
Being honest may not get you a lot of friends, but it will always get you the right ones.”
– John Lennon
Have additional questions?
Contact me at david@thefalconmethod.com.
