Ingeborga Mootz is almost a typical German pensioner. Her 83 of the year, she lives in the tiny town of Giessen, in a small apartment, furnished with old-fashioned furniture. She has blackcurrant juice in the fridge., and yellowed photographs of deceased or departed relatives hang on the walls. The perfect portrait of the average German woman of her age, if not for one "but". Ms. Mootz is one of Germany's most successful private stock speculators. For eight years, a lonely pensioner managed to make money on the stock exchange 500 thousands of euros and is not going to stop there. Today it is very popular in Germany, though, certainly, not so, as legendary investor Warren Buffett in the US. She wrote a book., Lectures, gives interviews and teaches pensioners, how to make money in the stock market.
The correspondent of "Expert" met with the iron frau of the German economy, to learn the secrets of her success.
Success story
– Mrs. Mootz, How it all started, How did you come up with the idea of playing on the stock exchange?
–You know, It's all fate, from which you cannot escape. For seventy-five years of my life, I lived very poorly. I grew up in a poor family, where there were a lot of children and very little money. Then I got married and became a housewife. And I had no money again. That is, there was money in the family, But my husband just didn't give them to me. I had to beg him for every stamp. If I asked him for five marks for some purchases, he gave me two and added: "Don't count on more". When I tried to go to work, My husband told me: "You're a fool, You'll never be able to make money". One day I couldn't stand it anymore and told him: "If you think, that I am not able to work, then I will play on the stock exchange!». It seems to me, He was seriously considering this phrase of mine, because, when he died six months later, I discovered, that shortly before his death he bought a thousand shares of the VEBA concern. They cost about forty thousand marks. This was my start-up capital. I decided, that this is just a sign of fate: I wanted to play on the stock exchange – and then a thousand shares fell into my hands. I said to myself: Out of that thousand shares, you have to make a million. I had no hesitation. I just wouldn't forgive myself, if I hadn't taken this chance! And I didn't have much choice. Overnight, I became a poor widow. Really poor. My pension was just tiny - in terms of euros less than a thousand per month. I just had to find a way to survive!
"And this method turned out to be very successful.
– More than! For 1997 In a year, my fortune has grown by one hundred percent, behind 1998 a year - already one hundred and thirty percent! And it was a year of financial crises around the world. Today, in eight years, I have half a million euros in my pocket. Three years ago, my niece gave me her savings to manage, And I earned her a hundred thousand, with which she bought a house. It was the first house in Giessen, for which one hundred thousand was paid in cash. When we made the deal, The notary had a very puzzled face! All in all, I'm no longer a poor widow, I don't have to live on a meager pension. I have enough dividends for everyday expenses. I can travel around the world and no longer worry, that I will have nothing to pay for heating. And I continue to multiply my half-million fortune.
– How did you manage to turn forty thousand euros into half a million in eight years? Without special education, without experience in trading on the stock exchange? And even at a very advanced age?
– In fact, everything is quite simple. My entire fortune is made on a single simple trick. I do not invest in investment funds, nor to bank savings programs. I just buy shares and sell them. I sold the VEBA shares inherited from my husband a year later – with a 100% profit. With the proceeds, she bought shares of IKB and Commerzbank. Wait, until they grow up, and sold it again, something that even an eternal housewife like me can do, is not it? I buy shares at a low rate and sell them at a high rate in a year and a half. After that, I buy other shares. It's that simple.
Some useful tips
– I wouldn't say that. I.e, certainly, Buy low and sell high – really, Sounds simple. But how to find stocks, which will surely rise in price?
– And that's also simple! See for yourself, Here is my diagram. I do not hide it from anyone. I buy shares at a primitive, but a very rigid algorithm. Firstly, I clearly outline the circle of companies, to deal with: Only those, whose shares form the DAX-30 stock index, or, in exceptional cases, M-DAX. That is, only the shares of the most capitalized companies in Germany fall into the circle of my interests. From them I single out those, that existed for a hundred years or more, which means, will certainly stand in the coming years. Besides, I invest in new subsidiaries of these large firms. All new subsidiaries are insured against risks, which means, if there are any problems, The insurance company will cover the costs. so, My first rule: I only buy stocks of companies with a solid history.
Secondly, I only buy bank shares. You can laugh, But this is my personal preference. The whim of an old woman. However, and it is easy to explain: Banks have colossal sums in their accounts. Their income from the provision of account services is growing from year to year. These incomes allow banks not only to pay their customers three to six percent per annum on deposits, but also pay good dividends to shareholders. Banks are not so dependent on fluctuations in supply and demand, And since the introduction of the euro, it has become much easier for them to work. look: in 2001 In Germany, one billion eight hundred million euros were paid in inheritance payments. What do the heirs do with this money that has fallen on them? Of course, They spend part of it immediately. But that, what they didn't spend right away, – are taken to banks. In banks, they are persuaded to open a savings account, participate in the savings program, and so on. That is, they offer all this financial rubbish with a guaranteed three to seven percent per annum. At best, clients are persuaded to give money to an investment fund, where they can easily disappear. That's why I buy bank stocks – they never have a problem with cash flow, They will cope with any problems.
–It's cool, We have decided on the field of activity. What's next?
"It's even easier. I open the newspaper and look at the stock report. By the way, I don't have a computer, I get all the information only from the newspapers. In the stock exchange report, I am interested in three figures: How much are the shares of this company worth today and what was their maximum and minimum price over the past year. If the current value of the stock is close to the minimum, this means, that the company has serious difficulties. But since this company has a century-old history, You'd better believe it, that in a year or two she would get out of these difficulties, and the stock will rise again. To make sure, that immediately after the purchase the price will not fall even lower, Just checking, what has been the minimum drop over the past five years. After that, I subtract the minimum price from the maximum share price – and here I have an approximate forecast of my income for the next year.
Of course, These predictions never fully come true, But they give a general idea of the situation. After such a preliminary analysis, I begin to look further: And what dividends are paid on these shares? If the company pays small dividends, I refuse to buy. For large investors, for hedge funds, For millionaires, this is, maybe, And it doesn't matter, But I'm an old lonely woman, I need something to live on. Therefore, dividends are very important to me. Finally, I study the composition of the company's shareholders and if I see, that the majority of the shares are owned by a couple of large shareholders, then this is also a bad sign. It means, what, probably, Dividend payments will be very small: Large shareholders have no incentive to share profits with small investors.
"It still sounds too simple.
– Yes, it's just! You know, Sometimes I perceive myself, like the biblical David. I'm an old weak woman. And I'm the only one struggling with this huge exchange system, with this Goliath. And I do it with the simplest weapon, as did David. I was convinced from my own experience, that the stock market Goliath has a weak point – cyclical fluctuations in the stock price of large companies. On this weakness I earned five hundred thousand euros, or a million marks. Now my goal is not even to make even more money, I've already earned enough of them. My goal is to tell all Germans, how you can defeat this Goliath and ensure your financial freedom.
Money rules the world – it is, Unfortunately, fact. Millions of Germans sit in disgusting offices from eight to six for the sake of a few thousand euros a month, save on everything, as much as possible. They all hope, that someday they will get rich, And wealth lies one step away from them! The problem is, that the Germans are completely illiterate financially. And large companies, First of all, banks, This illiteracy is supported in every possible way. When a person comes to the bank, to the management company, He hopes, that he will be helped to increase his money. Certainly, There he is told about, that the best investment is a long-term investment. Economists tell him the same nonsense from TV screens. Give us your money to manage for ten, twenty, thirty years and we will make you rich!
As if it wasn't so! An employee of the management company is an ordinary forced laborer. He will offer the client the wrong thing, What Really Makes Money, and that, What is beneficial to his company. Of course, The client will receive some income, But these are just meager amounts compared to that, What you can really make on the stock exchange. Besides, The client will have to pay a one-time fee for opening an investment portfolio, And after the sale of the share - also income tax tax. The client may incur losses at all, And no one will answer for it! I'm sure, that keeping the Germans in this illiterate state is a completely conscious position of banks and investment funds, and ultimately states.
Of course, They don't want to, For ordinary Germans like me to become millionaires. What investment funds will live on? What lotteries will live on, who earn millions of euros every week by exploiting the Germans' desire to get rich? Precisely because, that I want to change this situation, I do not hide my methods of playing on the stock exchange. I wrote a book about, How I Made Money. I give practical recommendations to everyone: I give lectures in the women's club, I give interviews to journalists, I answer letters. I receive a lot of letters, mainly from older women, who heard about me on the radio or read in the newspaper and finally believed in their strength. They all ask, Where to start and what mistakes to avoid.
"And what do you say to them?"? Besides, What I have just been told?
– I give some practical advice to all novice players. Tip one: A novice player must understand, what goals he wants to achieve. That, What Business Textbooks Say: Strategic goal, tactical goals, and so on. I always recommend starting small: buy, guided by my methodology, shares for a thousand euros and set a goal to become the owner of a thousand shares of companies after a certain time, included in the DAX index. So to speak, Get your hands on. This is the first and most important goal at the initial stage. because, Once you have a thousand shares of any of these companies, Amount of dividends, that you get, is already quite large, And for low-income people, it is always important to have at least a small, but a stable additional source of income. Because we are all not rich people, It is important for us to be able not to think about the most necessary expenses, And that's why dividends are very important to us. Besides, A thousand is such a great magic number. The player must feel, that he is lucky. And if you suddenly own a thousand shares of a large company with a century-old name, This gives you faith in your strength.
Second tip, that I give: Have patience, But know how to jump out of the train in time. Hold the stock for at least a year, But no more than two years - during this time the securities of a large reputable company will probably grow, But you won't have time to get attached to them, which would certainly lead to financial losses.
Third Tip: You shouldn't be about money, who invested in shares, Like a stash for a rainy day, as a means, which you can use for your consumer needs, if necessary. Postponed so postponed. Let them grow, Help them, Guide them, But don't take them out of the growth process. Passion for consumption is one of the main dangers for a stock market player. Yes, You can quit the game in a year or two and buy a car with the money you earn. It's certainly much better, How to take a consumer loan. But what's next? Counting every euro again? And if you have patience and let the money grow for another two or three years, You can literally become a millionaire - and you will no longer have any financial problems. I always say those, Who asks for my advice: Only dividends can be spent.
Without haste
– Start small, Being able to wait and not get carried away with consumption sounds very German.
–Unfortunately, not anymore. Modern Germans have long lost these German qualities and turned into frivolous consumers, who do nothing but, What do they follow from advertising?, take loans and buy a lot of unnecessary things. AND, Certainly, cannot pay off debts. I don't get tired of repeating: Give up meaningless momentary consumption. Set a goal for yourself - to earn a million. And calmly, Without haste and without chaotic movements, go to it. That is why my next practical advice for beginners is as follows: Stop thinking about your stocks in terms of their value. Think of them only in the category of the number of shares.
If you buy stocks and start monitoring quotes every day, then you will go crazy. Today some hedge fund bought a large block of shares, and the price soars by ten percent. And a couple of days later, to make a profit, The fund sells them – and the price falls again. For a hedge fund, making a purchase of thirty to forty million euros is like buying nuts. But a small shareholder, owning a thousand or two shares, can never make money on such fluctuations. He will only get confused, will undermine his health and lose even that money, that he had. Therefore, the only working option for us, Small shareholders, – consider your wealth as the number of shares and set a goal to double this number every year.
–Honestly, This looks somewhat naïve. Who cares, How many shares does a person have on hand, if a, allowable, Their price will drop several times?
–Of course, In most cases, this is the case. You can buy shares of a company even at the lowest price, but they will never rise to their former high level, And you will be left with nothing. However, I have already explained, that according to my methodology, you should buy only shares of large, proven companies over the years. And buy then, when they approached the lowest level in the past years, which means, They have only growth ahead of them, You just have to wait. The number of shares is important in my system because, that I recommend buying only those, on which good dividends are paid. See for yourself: on average, a share of a large German bank like Commerzbank pays twenty-five to thirty euro cents. Individual banks, for example, the same IKB, pay very generous dividends, up to eighty euro cents, But this is rather an exception. Anyway, if you have a thousand shares of the same Commerzbank, This means only two hundred and fifty to three hundred euros in dividends. But if there are already two or three thousand of them, then dividends amount to a thousand euros or more - for any German pensioner this is a very good increase to the pension. And with each new doubling of the number of shares, this amount increases. Furthermore, if a stock have been owned by you for more than a year, And the total amount of dividends does not exceed two and a half thousand euros, then, according to German law, You are exempt from paying income tax. So it is the dividends that allow me to wait calmly, until the stock price reaches its maximum, and not to flinch at every news of short-term fluctuations in exchange rates.
"So what, Your method has never failed?
"Only once. IN 1998 I bought shares of the Bank Bankgesellschaft Berlin. Then I thought, what, Since the board of this bank includes leading politicians, it must be reliable. However, everything turned out to be different: all this time, the bank actually sponsored the Christian Democratic Union at a loss. Remember the scandal with Chancellor Kohl? So here, When the scandal came out, Shares fell even further, and I had to sell them at a loss. I lost ten thousand marks on it. Since then, I have never trusted politicians and only buy shares in those companies, in the boards of directors of which there are no party functionaries. However, This story did not really harm my condition. At the same time, Commerzbank shares rose strongly, And I ended the year with a profit.
"And there was never a fear of losing money?
–Never. I'm just not obsessed with money. I have already said: I don't own money, but with shares. I'm not afraid of losing them. Every year and a half, I sell them and buy new ones – usually, thanks to the difference in rates, twice as many. As you can see, My scheme has never let me down. The main thing is not to panic at short-term fluctuations in the exchange rate, Do not chase excessive profit, give up the consumer fever and calmly go to your million. By the way, I could have already reached my goal of a million marks – if the euro had not been introduced. So now I have a new goal, And I'm just standing halfway to it. To my mind, This is a sign of fate: No one should rest on their laurels.
