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Good day subscribers thank you so much for joining me today i am jeremy this is the financial education channel and today we’re talking about my greatest investment ever my greatest investment i’ve ever made ever ever in history ever and how this is determined is it’s the one i made the most amount of money so a largest amount of money on ever in that stock
Is cabela’s have you guys ever heard of the cabela’s before let me know in that comment section cabela’s is an outdoor retailer and they build very large stores that have to do with hunting and guns and a lot of different things like that camping all that kind of stuff so i came across as cabela’s in it was around late 2002 late 2011 and that’s when i started
Investing in it and i came across it actually i came across it toward the beginning of 2011 i didn’t start actually investing in it till around mid 2011 and i just really like the business now i will explain to you guys in this video how i determined how this was gonna be a huge investment and this is why i went huge in on the stock he was my biggest stock for
Like two years running straight as far as the most amount of money i had involved in that stock and how did i get these great gains so let’s look at what happened with the stock price over that course of time so i came across but we’re looking at the chart here you see 2010 is very far to the left there 2016 and currently his way to the right i came across the
Stock like i said it was it was in 2011 and probably early 2011 i didn’t start investing it until mid 2011 and from mid 2011 up until 2000 you know mid 2012 i was buying all during that period so if you look on the chart there i was buying in a range of between 20 and let’s say about 28 dollars a share so my average cost basis i believe on the stock was actually
24 $25 now how did it become such a successful investment for me well i saw a few things with the business i started looking into it and the 2010 annual report is the first annual report read on the company so that’s the one that comes out after the whole 2010 years over and that was already into the 2011 at that time so that was their latest report now what i
Saw here as a business i saw 2008 numbers it did 2.5 billion in revenue 2009 they did 2.6 billion dollars 2010 they did a little little bump to 2.6 billion dollars a little more than they did the previous year not substantial in any way and what i saw was a business that was still able to grow revenue despite a severe recession that’s very big that’s very very
Important i saw a company that had a net income look at that net income that was going up from 82 million in 2008 to 91 million in 2009 to 121 million in 2010 so i saw a company that despite a very tough economy an economy that was very weak that retailers were getting killed as far as net income went killed as far as revenue went and cabela’s was still able to
Grow that that made me although in that process time it was kind of a scary time and still invest because they were talking about double-dip recession zhh and things like that it was kind of a bit of a scary time but i thought hey you know what even if this company goes into recession they’ll still find a way to grow they can still be profitable so no matter what
Happens out there this is a well-run company they got their stuff together and their customers are spending money there despite whatever’s going on in the macroeconomics so that i saw a very very good financial model and i saw a business that i really liked as far as cabela’s stores i first came across the idea because i went to a cabela’s store out in arizona it
Was like 160,000 square feet and i was just blown away how cool it was the experience was so much different than any other retailer in it that’s what captured my imagination to even look into cabela’s in the first place then i saw these financials and i was like whoa okay cabela’s i like you so reading across that annual report i read about retail expansion i read
About a lot of different things but the one that caught my eye is retail expansion given the significant improvements in retail profitability in merchandise gross margins and the performance next generation stores next generation stores were actually much smaller than the current generation stores which they were building stores at that time like 160,000 square
Feet to like 300,000 square feet like ridiculously big way overly big than what they need to be these next generation stores they were building were around a hundred thousand square feet which helped out with profitability helped out with expansion i really liked that we are saying that our 2011 will be our the year we accelerate retail expansion i saw that and i
Just that line just made me excited because finally they had not really grown retail stores for the last two years really they kind of the recession came and they kind of stalled everything they relooked at the business and they kind of figured out hey you know what these stores are too big that we’re building they can be much more profitable if we can find a way
To shrink the size get rid of some of the products we have too many of and still give a great experience and so that’s what i saw with cabela’s at that time and they’re really excited me that they could expand you know all across the united states the grand openings for cabela’s are ridiculous if you guys have ever seen a cabela’s grand opening or been to one
It’s the only retailer i know they can get thousands and thousands of people to show up for a grand opening of a retail store that’s ridiculous is preposterous it’s holy smokes mind-blowing thousands of people showing up for a retail store opening cabela’s is the only one i’ve ever known to do that only one only one unbelievable what they can do now in this
Whole retail thing the reason i saw so much opportunity for expansion is we currently operate thirty-one retail stores 30 in only 22 states they were in and one in canada so bring up the bat rate there i’m like this this company has so much room for expansion they’re only in 22 states only up 31 stores total only one in canada canada’s a great market for outdoor
Type activities like fishing kayaking camping you know guns all these types of things and i know how you know gun-crazy united states is there’s a retailer as far as if you want the opportunity to purchase weapons and those kinds of things in that type of business so i looked at cabela’s and i saw the retail expansion and then i saw one other thing that no one
Really saw coming so what i saw was a presidency that was about to come up so it was romney versus obama going in 2012 to see who was gonna be the president of the future there was so much negative publicity around obama and that he was gonna take away everybody’s guns and no one’s gonna be allowed to have guns and all this stuff and i saw this and everybody in
The industry at that time was actually looking at this as a negative for stocks like cabela’s stocks like smith what smith & wesson ruger all these stocks and i saw this is the biggest opportunity i’ve ever seen of probably ever as far as stock goes because this was just gonna force people out to get guns all this fear-mongering all this propaganda was just
Building into people’s imagination that gun owners were like i need to go out and get my gun right now i need to go buy as much ammunition as possible obama’s gonna take away our guns if he’s elected sure enough obama got elected in 2012 reelected i should say and everybody their pants that’s a gun owner and they all went to cabela’s left and right buying as
Many guns as they could freakin get their hands on ammunition was like sold out everywhere it was ridiculous the gun boom that happened in 2012-2013 we may never see something like that in our lifetime what a time to be invested in a stock that gets one third of their revenue from guns and ammunition holy smokes i would go to the my local cabela’s and whatnot just
To see you know how business is in the gun they had huge gun sections and we’re talking guns were depleted down to almost nothing and there would be hundreds literally hundreds of people in the guns and ammunition section huge shelving where ammunition is usually stacked to the ceiling depleted down to where there where five out of six spots are actually empty for
The ammunition it was like something i’ve never seen before and then you read this here about this was actually talking about boom back in 2013 2012 about one third of cabela’s 3.1 billion dollars in sales last year came from firearms ammunition and accessories and a substantial amount of its all-important sales growth came from the gun business cabela’s first
Quarter 2013 same store sales growth was up 24% comparable store sales for a company of cabella size at that time to be up 24% is like unheard of this is the most ridiculous number i’ve ever seen ever and you want to talk about a stock that also went from being a nobody stock to one that everybody want to be instantly that was cabela’s 24% comparable store sales
Were up it’s ridiculous if you can if you’re a retailer and you can get two three maybe four percent that’s really good if you can get five six seven percent same store sales growth that is like great if you have twenty four percent that’s almost like i’ve never on her that’s like unheard of unbelievable the gun boom was like the thing that made me so much money
As far as cabela’s talked when it was a thing of beauty for me absolute thing of beauty now i sold out of the stock in it was i started around late late 2013 all the way into about mid 2014 is when i sold out i sold all my shares in between the high 50s in about the mid 60s the stock actually peaked at 72 40 so i wish i would have waited until the stock was rate
At the peak at 72 dollars i sold everything and then got out the stock dropped substantially after that time period because the gun sales boom was over and cabello started to disappoint as far as comparable store sales because there was no way they were going to keep up with those type of numbers it was impossible they were ridiculous numbers so the cabela’s began
To disappoint and went down and down down lucky enough they had already been out of the stock because i kind of saw that this this type of craziness that was going on it was not sustainable it was a simply a gun bubble it was a gun bubble that’s all we can call it now for you guys that are interested in cabela’s nowadays they actually just got bought out or going
To be bought out by bass pro cabela’s agreed to be bought by bass pro shops in a five point five billion dollar deal handing a victory to the activist investor that had been pushing for the outdoor sports equipment retailer to put itself for sale no offer sixty five dollars and fifty cents so actually around some of the dollar amount that i started selling shares
Around and represents a nineteen percent premium of cabela’s most recent closing price the company said monday in a closing statement capital one is gonna take over cabela’s credit card business and then the retail is gonna obviously be taken over by bass pro shops i kind of saw this deal going for a while i didn’t reinvest in cabela’s just because although i saw the
Deal coming and i saw this happening i was like just i you know what if the deal doesn’t happen and i don’t really want to be in cabela’s because i didn’t see big up to upside to cabela’s anymore at this point so i didn’t get that gain but at the same time i’m happy to be out of cabela’s and whatnot so that was my greatest investment ever guys and i think there’s
A lot to be learned here about kind of having a vision and kind of being able to foresee some things in the future now regardless of obama would have been reelected 2012 let’s say romney would have been elected there probably never would have been that huge gun boom that had comparable store sales gone crazy but when i made money on cabela’s i believe absolutely
Absolutely i would have the same store sales and all those things were we’re really good with cabela’s even if you take out the gun ammunition in those kinds of things same store sales are still have 9% they were still expanding left and right retail stores so the gun boone just helped me create a massive amount higher of the stock price you know a hundred two
Hundred percent gain versus maybe it would have been a forty or fifty or sixty percent gain so regardless i should have been fine on that one i hope you guys really enjoyed this story today give this video a thumbs up if you did enjoy it and if you have not subscribed you may want to i talk ton about investments and stock market like we did today we talk personal
Finance in this channel in business i’m an entrepreneur and i give a lot of entrepreneurship types you know tips out there to you guys thank you for watching and have a great day
Transcribed from video
My Greatest Stock Market Investment EVER! – Financial Education By Financial Education