Investing Beyond The Noise podcast: Hanging on to your winners

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Tim Clarkson, vice president of investments at Van Clemens and Company in Minneapolis.

Hi, my name is Tim Clarkson, and I’m a stockbroker. And I’ve been a stockbroker for 40 years with a firm called Van Clemens

Today, I want to share with you some of the things I’ve learned that I think can be helpful to people who are trying to make money in the stock market. So, I started in the stock market, quite frankly, because I just found it very exciting. I used to go down to the Minneapolis Public Library, and I’d read about stocks. I’d get so excited the hair on my arms would raise. And I decided when I was at the University of Minnesota that that would be a great business to be in, a business that I was excited and enjoyed. And honestly, the stock market has been everything I hoped it to be on top of making a lot of money. So, I want to talk about the process that will allow you as an investor to make that money too. 


  • Key ideas to building wealth: 1:09
  • Local, MN company that provided 100 x the return: 4:29

Identify and hang on to your investment winners

First of all, it’s important to understand that four key ideas are critical to being successful in the stock market. And those are cognitive ideas. I’m only going to talk about one today, and that’s hanging on to your winners. But all four key ideas are critical. But even more important than the cognitive piece, and this is something that people in our industry don’t do a good job of, and that’s the emotional backdrop of a successful investor. And I think there are two pieces to it. One is, you need to get excited and enjoy the process. What happens in the stock market is crazier than any kind of soap opera or any kind of fictional story. And it’s just a fun process. It’s interesting. You don’t always make money there are ups and downs. But it’s a very, very exciting business to get involved with as an investor and certainly as a stockbroker, and I want to get people to get into the game. 

Secondly, there are emotional challenges in the stock market, and we’re going to talk about those not so much in this podcast, but down the line, dealing with difficult emotions is probably as or more important than even the four cognitive ideas I’m going to give you. But between those four ideas and understanding some of the emotional challenges, I think you’ll become a better investor. I think this podcast will be worth your time. I want to talk about a couple of ways typically people invest. So right now, most people invest in the stock market with either index funds or mutual funds, and they’re very, very diversified. And that is a safer way of investing. However, the problem with that is many people don’t, they’re so afraid of the stock market, and they have sold an understanding of it, they screw that up too. So, by understanding the way an individual stock works, you’re going to be a much better investor in your mutual funds, in your index funds. This will be valuable for the person who just wants to be smarter about his overall stock investing. 

I also want to encourage people who are doing investing or speculating on their own to become better investors, better speculators, and there’s a tremendous amount of what I consider very, very dangerous speculation going on. And most people, if they’re honest, they don’t buy a really good investment. What they’re doing is buying a story and buying a stock movement. And their goal is to make a relatively small amount of money in a five, 10%, 20% in a short period. That type of investing ultimately is not going to create a lot of wealth. That’s just from my vantage point a waste of time. And so I want to encourage people to get more serious about their investing and think through what they’re doing and make a lot of money when they’re right. So, one key idea, and I’m going to keep this podcast short because I know people are busy. 



The one key idea if you take nothing else from the podcast, the one key idea is that you want to learn to stay with your winning ideas. If you own 10 stocks, I guarantee you are most likely you’re going to make 80% of your money with 20% of your ideas. It’s the old 80/20 rule. And that rule is so important in investing. And so, I determined when I was just got into the business that if I ever got a huge winner in the stock market, I was dedicated to hanging on to my winners. 

100 times on the money

And let me tell you the story about how a huge winner then came into play. I was involved in a medical company. This is back probably in the early 90s called Daig and probably most of you’ve never even heard of the company. But Daig was a small company, was only a million and a half shares outstanding. I had about 30, 40% of the float on my business. And my clients were very excited about being in the medical device industry. And then we got lucky. Daig developed a new product called a percutaneous catheter introducer. That’s a device that’s used to start cardio procedures so they don’t have to open up the chest. You go through the femoral artery, and they developed a device that was lubricious and didn’t hurt the patient and so became very popular with the cardiologists because it just made that whole procedure smoother, and their sales exploded. Their sales went from nothing to about 40 million in three years. Ultimately, they were bought out by St. Jude’s Medical, and it went 100 times on the money. That’s all great. But the part that I’m proud of, and the skill part of it was, I hung on to that stock. And I made an average of 50 times on the money. And when I made 50 times on the money, that changed my life, and it changed the life of many of my investors who had stuck with me earlier. So, I want to teach people the importance that (if) they do get a big winner, you want to get paid for it. 

So lastly, get back to the emotions of this game. The stock market is a really interesting game. It’s a fascinating game. It’s a dynamic game. You know, by comparison, you know, I spent my life, you know, a sports guy. So, I cheered for the Gophers, and I cheered for the Timberwolves, and I cheered for the Vikings and the Twins. And let’s face it, you know, did Kirby Puckett or did Fran Tarkenton or did Kevin Garnett…have they ever given you a dollar? I don’t think so. So, the reality is the stock market will provide you a lot of money if you invest time in it if you do it properly, and I’m going to teach you the skill sets that will allow you to be a successful investor. 

Disclaimer

Lastly, I want to just do the disclaimer, we have a disclaimer. It’s a very regulated business. The discussions contained herein refer to this podcast are provided for educational information and entertainment purposes only. The information statements, comments, views, and opinions expressed or provided are not necessarily those of Van Clemens and may not be current. Van Clemens does not make any representations or warranty as to the accuracy or completeness of any of the information statements, comments, views, or opinions contained in this podcast. Any liability, therefore, is expressly disclaimed. Van Clemens does not undertake any obligation whatever to provide any form of update, amendment change, or correction to any of the information statements, comments, views, or opinions set forth. In this podcast, you should not make any decision, financial, investment, trading, or otherwise, based on any of the information presented in this podcast without undertaking independent due diligence and consultation with a professional broker or financial advisory. You understand that you are using any and all information available on or through this podcast at your own risk. 

Thanks again for your time! I’ll be coming forward with additional podcasts, explaining my philosophy and how you can use these rules to make yourself a lot of money.