Up to 58 inches of snow piled on the East Coast during the Great Blizzard of January 1888.
Commerce from the Chesapeake Bay to Maine was paralyzed. Railroads couldn’t get through the snow. And steamboats were stranded in ports and at sea.
Communications stopped, as it had so many times in the past. But that wasn’t supposed to happen anymore. Telegraph lines provided real-time communications, and companies were building an ever-expanding network of wires along railroad lines.
But telegraph poles broke because no one accounted for the weight of 50-foot snow drifts.
William Vanderbilt saw the problem from the top floors of his Fifth Avenue palace in New York. He also saw opportunities, just as his grandfather Cornelius did when building his $100 million fortune.
As investors, we can glean a valuable lesson from the Vanderbilts…
The Vanderbilt Blueprint for Growing Fortunes
The Commodore, as Cornelius Vanderbilt was called, started with a sailboat in 1810. Seeing growing competition from steamboats, he bought ships that used the new technology. Seeing competition from another new technology, railroads, Vanderbilt added rail lines to his empire.
Decades later, the telegraph presented another chance to increase his wealth — leasing land for the lines connecting cities.
In January 1888, William saw it was time to adapt again. He invested heavily in Western Union, providing funds for the telegraph company to bury its cables underground. This increased profits for the company since communications were now safe from acts of nature.
William and his heirs continued making investments in new technologies as they emerged. The family bought stakes in transatlantic shipping lines as steamboats became obsolete.
They invested in the companies that made railroad cars to benefit in additional ways from the tracks they owned. They were early investors in airlines like Pan Am as travelers moved to the sky. They added stakes in broadcast networks like ABC to benefit from wireless communications.
The Vanderbilts added to their fortune by constantly shifting their focus to wherever technology took society.
Time and again, the family displayed an uncanny vision for what would be the “next big thing” — leveraging their existing wealth and influence to gain early, dominant positions in those new booming sectors.
Invest for Tomorrow: Follow Tech Trends
The story of the Vanderbilts serves as a masterclass in adaptability and how it’s the ultimate key to not just attaining wealth but growing it across generations.
As new technologies upended entire sectors, the family avoided the trap of stubbornly clinging to fading industries where their fortunes were founded.
As investors in a time when change comes faster than ever, we can take this Vanderbilt example to heart.
Clinging to nostalgia or arrogantly believing we’ve found a permanent cash-printing machine is the path to self-inflicted financial ruin.
Maybe you were an early investor in Microsoft, Amazon, or Tesla. If so, you benefitted from the foresight of Bill Gates, Jeff Bezos or Elon Musk.
Now it’s time to think like Gates, Bezos, Musk — and Vanderbilt. They all knew there was a risk of something new that could make them obsolete.
As investors, it’s not enough to benefit from the titans of today. We have to be able to identify the titans of tomorrow.
Adam O’Dell has done just that, and he’ll be sharing his latest research into who has the technology that could change our lives and create generational wealth for us if we invest early alongside the titan.
Be sure to watch for more details on his latest discovery tomorrow.
Until next time,
Mike Carr
Chief Market Technician