Have you ever wished you could see into the minds of the investing greats? Learn how they make their choices with proven methodologies that beat the market again and again? In his new book, Richard Thalheimer offers an unparalleled look behind the scenes, laying out his system for predicting success. After spending more than 20 years curating winning products for The Sharper Image brand, Richard now applies his system to picking investments with results that consistently beat the market. 

If your goal for annual returns is 30 to 50% across your investment portfolio, which Richard has done better than in many, many years, then this is the book for you as he walks you step-by-step through his formula for success, a formula that can boost your results significantly, helping you reach or even exceed your financial goals.

Hey Listeners, my name is Drew Appelbaum and I’m excited to be here today with Richard Thalheimer, author of The Sharper Investor: A Winning Formula That Boosts Your Returns. Richard, thank you for joining again. Welcome to The Author Hour Podcast.

Richard Thalheimer: Thank you, Drew. A pleasure to be here.

Drew Appelbaum: Now, for those who don’t remember our first podcast, can you give us a brief rundown of your professional background?

Richard Thalheimer: I had a very fun career starting a company when I was 23 and that is The Sharper Image, which is a group of 200 retail stores, a catalog and an online presence selling gadgets mostly. I did that from age 23 till I left, about age 66, so that was fun.

Drew Appelbaum: Yeah, wow. When we first spoke, we talked about your first book which was The Sharper Image Success: Business Lessons From America’s Gadget Guy, and here you are again, a short time later. What was it that motivated you to write another book?

Richard Thalheimer: Well, I always enjoyed investing, but I never had the time to do it when I was at The Sharper Image. After I left The Sharper Image, I devoted my attention full-time to the stock market and developed some techniques and patterns of trading over the years that turned out to be so successful that I kept sharing it with people verbally and they seemed interested. I thought, why not try and summarize it and share this information with everyone that’s interested so they can learn how to make more money in their stock market investing.

Drew Appelbaum: Now, when you decided to share these tips and tricks, who in your mind were you writing this book for? Is this for brand-new investors, kind of the novice investors, or just seasoned investors who may be looking for a new approach?

Richard Thalheimer: Well, both and I made that very clear in the book that for beginner investors, there’s really a lot to learn and it’s complicated. For people who have a lot more experience, what this will do is give them some insight into a little bit different approach that they may find can boost their returns and, if you don’t mind me just missing a few numbers, the average hedge fund manager is shooting for a 12 to 18% return per year on their portfolio.

A lot of naïve or beginner investors are happy to turn their money over to these funds and hope to get that 12% a year. I think we can do better than that, I think we can get 30 to 50% a year returns and I’ll show you how.

Drew Appelbaum: Now, did you do research for this book, or are these all lessons learned through your investing experience?

Richard Thalheimer: Drew, you’re so funny. This is the school of hard knocks. Nature is a brutal teacher because you tend to get the lesson after the experience. You want to get the lessons before it hits.

Adding Up Your Winning and Losing Moves

Drew Appelbaum: But it’s the best teacher. Digging into the book, I love that you actually dedicated the book to your father who, you say, taught you about investing in stocks and option trading. Can you talk a little bit about that relationship and maybe some of those lessons you learned from him that are still sticking with you today?

Richard Thalheimer: Like a lot of beginning investors, I tended to want to buy stocks and see if I could make my portfolio grow. My dad was really into a different approach, which was using options, and what I did was take the advantage of using options, which a lot of people do already, but in a slightly different way, with my own twist, based on my own experience.

I took that beginning lesson from my dad, refined it over, for the last 10 years, and now it’s really solid, at least in my experience. And just to titillate everyone a little bit, the book mentions the last four years, the returns of average over 100% per year, which is really ridiculous. I mean it’s unheard of, but it happened.

Drew Appelbaum: Let’s just go to the basics of investing. Do you need to be a financial genius to actually win in the stock market and have 100% returns year over year?

Richard Thalheimer: That’s one of the fun points that I make in the book and I make it very clearly. We are going to use an approach that the average person can grasp and do, it’s relatively simple compared to what a lot of sophisticated, so-called sophisticated investors do, our approach is fairly simple, and you can do it without much experience. It’s based on first understanding the concept which Peter Lynch wrote about in his book, One Up on Wall Street about 20 years ago.

It begins with the premise that you choose stocks that you understand and that you love. This is like going to Chipotle for lunch, right? We can decide, this is a good meal at a great price from a well-run company that seems to know what they’re doing and they’re doing it better than a lot of other companies. There’s a starting point. Amazon is the same way. Apple is the same way. Choosing the right stocks is the beginning. 

Drew Appelbaum: It seems like it’s so genius and also so basic at the same time, just to step back in your life, find things that you use every day, whether it’s a product, a service, a restaurant group. Can actually turning that around to an investment in those companies actually make you money? 

Richard Thalheimer: It definitely can and it will make you probably 6 to 12% per year. What we’re going to do is add two steps to this and build on that first step. The first step being choosing the right companies. We’re going to take that return and boost it from 12% a year to 30 to 50% a year.

Drew Appelbaum: In the book, you do talk about those other fundamentals that you use to educate yourself to maintain your market knowledge and to maybe look on the wire to see if anything that’s moving in the market. Can you share some of those tips and tricks to how you find companies you like to invest in?

Richard Thalheimer: Well, I start with the premise that I have to understand the company and I have to understand what they do. For me, that rules out a certain number of companies because I honestly, don’t understand what AstraZeneca does or what Pfizer does, I don’t understand it. I mean, I understand they do a vaccine for COVID perhaps, but that’s the depth of my knowledge of Pfizer. I do understand Dominos Pizza and I do understand Tesla Cars.

Drew Appelbaum: Now, with the flood of new investors that entered the market last year, just from all of the news and the online platforms that make trading really available in the palm of your hand, do you think investors really need to go back to square one to learn the basics of trading and especially options trading that’s out there for them?

Richard Thalheimer: Well, I find in my experience at least, Drew, most people don’t do options. The average investor does not trade options and the reason for that is they’ve been told that options are very dangerous and they could lose all their money. I think a lot of my book is devoted to convincing the reader that it is possible to manage the risk so that there is no danger and, at the same time, boost your returns up to 30 to 50% a year. I think there’s a lot to learn for the beginning investor who doesn’t know much about options.

Drew Appelbaum: I do like when you discuss the options trading portion of the book. I like that you actually talk about real moves that you’ve made in the market and very recently, I may add and that you actually talk about both winners and losers.

Richard Thalheimer: I’m laughing because I find there are lots of losing moves and lots of winning. Let’s not forget, at the end of the year, what we’re doing is adding up the losing moves and the winning moves to get a total and we want it to be positive 30 or 50% but we will definitely make some mistakes along the way, that’s just part of the game. It’s like playing baseball, I mean, you hit 360, you’ve got a fantastic average but that means you missed two-thirds of the time, right?

Drew Appelbaum: Right. Can you talk about maybe one of the bigger wins? You don’t have to mention dollars and cents but bigger wins and bigger losses and maybe what lessons came along with those?

Richard Thalheimer: Well, the biggest win by far of the past four years for me has been Tesla. That started when I first saw a Tesla car in 2012, decided to do a test drive, and thought to myself— because after all, being at The Sharper Image for 40 years, I know products, I know gadgets— I know good products. I drove that product and I thought, “This is an amazing change”. This is like Apple introducing the first iPod, which The Sharper Image happened to introduce, the first iPod.

I could recognize something phenomenal when I saw it. However, let’s not forget, during the past four, five years, there had been so many Tesla doubters and haters, short-sellers, people who predicted Tesla would go bankrupt and never make money.

Instead, just this week, we’re recording this in what? Fall of 2021, Elon Musk became another hundred billion dollars more wealthy, which brought his net worth up to about 300 billion. He did this all on Tesla, which became a phenomenal success, which I predicted four years ago and made public press releases about it. That was clearly the biggest winner and, forgive me for rambling on, but it’s just such a huge success.

Drew Appelbaum: Is there one that didn’t work out and was there a lesson from that as well?

Richard Thalheimer: Well, I’m a great believer— I can think of lots of losers but I’m a great believer that Boeing, the aircraft company is a good investment right now and is going to grow and improve. Boeing stocks are up to about $450, it’s currently about $220, less than half. In the past year, I have repeatedly put money into Boeing and seen one disappointment after another.

The stock has not gone anywhere because they keep having small problems along the way, which makes you question if the company is well-run. The reason I’m such a bull on Boeing is because we will get over COVID, we will see air travel resume, we will see lots of tourists, even though New York doesn’t have very many right now.

It will change, the aircraft business will be good. Boeing will do phenomenal, but I keep missing it because there’s always been one more problem after another and that’s part of the investing game is you get surprised, things happen which you don’t expect.

Drew Appelbaum: Now, going back to the options. First of all, you explain it better than anyone that I’ve read, it makes so much sense the way you describe options trading, how to figure out the numbers and why it can be better for you or maybe not for you, depending on your investing strategy. But you suggest that novice investors take call options that are about two years out. For early investors, they get really nervous with their money. How do you teach patience in the market as well? 

Richard Thalheimer: Every investment I make, I would like to see it go green, go positive right away. I don’t want it to be negative and I expect it to be positive and when you see that, you feel good, you don’t feel impatient, you feel great. If you do a two-year out call option on your favorite stock, say, Amazon, and it goes positive and you see that green number on your screen, you feel good right away, and here’s the rub, here is where the tire meets the road.

As it goes green, as it goes positive, a two-year out-call option will produce a return that’s so much higher than having bought the stock, so you will feel great about that, and you will not feel impatient at all. 

Drew Appelbaum: Now, you also give a bonus to readers at the end of the book where you give them 25 pro trading tips for them to use. Do you want to go over a few of those, maybe name a few of your favorites? 

Richard Thalheimer: Sure, let’s talk about one of my favorites, which is so simple it’s ridiculous. Yet, it is the key to being a successful trader. One phrase everyone should memorize is, buy low sell high. That’s pretty obvious, isn’t it? 

Drew Appelbaum: Yeah. 

Richard Thalheimer: Buy for less than what you’re going to sell it for. So many people can’t do that. Why? Because when the market goes down one week, they panic and what they say to themselves is, “I’m going to lose all my money, I should get out while there’s still some left”, but they’ve got it wrong. What they should be doing is buying when the market is going down because we want to buy low, right? 

We want to buy it at a reduced price. If the market is going down, if it’s on sale, the stock prices are depressed, what a great time to buy low, and yet people can’t do it. Most people have a lot of trouble with it, so we’re going to teach them. Don’t buy it all the day it goes down, do what we call averaging in or nibbling, I call it. Say you’ve got $10,000 to invest. The market’s tank, take $2,000 of that $10,000, and buy your favorite stock. 

Everyone else is selling, you’re getting a discount. Wait a week, if the market goes down some more, buy another $2,000 worth. Now, we’re averaging in and we will catch the bottom. Now, we’ve bought low. Now, we wait. Someday we’re going to sell high. 

Take Baby Steps To Success

Drew Appelbaum: Now, the market continues to go up and up and you have a successful track record over many years, but for folks who come in and get a little taste of success, is there a fear that there might be a correction or even a plateau and then the gains that people are seeing now maybe aren’t what they will be seeing in the future? 

Richard Thalheimer: Well, there are some different approaches to this question, but one is to think of the concept of a dip, our point A out of our trading tips happens to be. Dips are buying opportunities, so we wait for the market to correct. It happens every two months practically. There is some terrible news, the market has a big down moment, this is your opportunity. I don’t know how I can emphasize that enough, dips are opportunities. 

The market has gone up for 50 years at about 10% a year. We can assume, I think, the sun will be shining tomorrow, and the stock market will be probably going up, as it has for the last 50 years, because economies grow, earnings will grow, and businesses grow. Dips are opportunities. 

Drew Appelbaum: What actions do you hope that a reader will take after reading the book? Do you hope that they’ll study the market more? Do you hope that they will open their first account or just be more educated and have their eyes open to investment opportunities in the world? 

Richard Thalheimer: Great, great question, Drew, and what I clearly say in the book— and I repeat it several times— go to an online broker like E-Trade or Ameritrade, open an account, it’s free, put a little money in, it can be as little as $10,000 or $5,000 or put in $50,000, whatever you feel comfortable doing, start doing a few small trades, take baby steps. I can’t forget that movie, what was that? Bill Murray, Groundhog Day. 

Drew Appelbaum: Yeah. 

Richard Thalheimer: His therapist kept saying to him, “Take baby steps”, so we’ll take baby steps. We’ll make some mistakes, we’ll have some successes, we’ll see how it goes for the first month or the first six months and then you’ll slowly increase your moves, increase your trading, increase the size of your portfolio as you see success. 

Drew Appelbaum: Now Richard, you’ve had a successful company for such a long time. You’re now a successful investor, so I have to ask, are we going to be talking about book three soon? What else will you be conquering? 

Richard Thalheimer: Well, I certainly had a lot of fun. The first book, Sharper Image Success, was a fun time for me to revisit a lot of the ups and downs of The Sharper Image, which mostly were up, thank goodness, and to share some antidotes with the readers, they were fun. And in this book, the investing book, it’s similar in the sense that we share some really real big stories of disappointments and successes in trading with names that we’re all familiar with, like the Amazons and the Apples and the Teslas. 

I guess now it’s up to me to prove to myself and to our readers that this works well and if it does, it would be fun to do a third book to just refine things a bit, maybe add a new twist or two based on how the trading goes for me in the next couple of years. 

Drew Appelbaum: Sure. Well Richard, I just want to say that just writing a very digestible book on investing and sharing your Sharper Investor winning formula with everybody and just helping them go on a path to wealth is just a very good deed and I just want to say thank you so and congratulations on publishing your second book. 

Richard Thalheimer: Thank you. You know, one thing we haven’t mentioned and I just want to throw it in because I think it is so much fun, all of this is done with an E-Trade account or an Ameritrade account or a Schwab account and you can do it on your phone or your iPad or your computer. We don’t need any fancy trading rooms, we don’t need 10 screens, we don’t really need much. 

How crazy is that that you can do it on your phone while you’re on the train or commuting or just having fun sitting at home watching Dancing with the Stars in the background, and you can do this and make 30 to 50% a year for yourself? What a great, fun activity. I don’t do any Facetime, I don’t do any Instagram, I don’t do any Snapchat, I just make money on my phone instead. What a great idea. 

Drew Appelbaum: I do have one question left, and it is a great idea but, if readers could take away only one single thing from the book, what would you want it to be? 

Richard Thalheimer: You have to have the confidence and the mental resolve that when things look like they’re going to hell in a handbasket, excuse my language, this is the opportunity for you to make money. A lot of mornings I wake up the market has tanked and crashed. My portfolio is off 5% and my initial reaction is disappointment because I want it to go up every day, but my second reaction is, “Hey Richard, get to work and find a buying opportunity.” We’re going to buy low, right? And sell high. Today is the day, buy something low. 

Drew Appelbaum: Well, Richard, this has been a pleasure and I’m excited for people to check out your new book. Everyone, the book is called, The Sharper Investor, and you could find it on Amazon. Richard, besides checking out the book, where else can people connect with you? 

Richard Thalheimer: Oh, they should go to thesharperinvestor.com, that’s a website of mine that provides free investing advice, tell some stories, gives some insights into some trades that worked and some that didn’t. So, that is thesharperinvestor.com and sign up for the email news. It’s very short, it only comes out every couple of weeks and it’s free.

Drew Appelbaum: Well, Richard, thank you so much for coming on the show, for giving some of your hot company and hot stock tips in your book. I think everyone should check that out and I want to wish you the best of luck and congratulations on having your second book being published. 

Richard Thalheimer: Well, thank you, Drew. It’s fun to talk about it and I appreciate you taking the time.