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The phrase…
“Rules are meant to be broken”
May have been true when you were in highschool.
But if you want to be a successful investor.
Here are 3 rules you should NEVER break in the stock market.
- A THREAD -
“Rules are meant to be broken”
May have been true when you were in highschool.
But if you want to be a successful investor.
Here are 3 rules you should NEVER break in the stock market.
- A THREAD -
Rule #1.
“Buy Damaged Stocks, Not Damaged Companies”
There’s a difference between a damaged stock and a damaged company.
A damaged stock is caused by a decrease in investor confidence.
“Buy Damaged Stocks, Not Damaged Companies”
There’s a difference between a damaged stock and a damaged company.
A damaged stock is caused by a decrease in investor confidence.
For example, back in March when we saw large companies like:
-Tesla
-Microsoft
-Exxon Mobil
All take huge dips.
This was as a result of the market being damaged by the pandemic.
As well as decreased consumption.
-Tesla
-Microsoft
-Exxon Mobil
All take huge dips.
This was as a result of the market being damaged by the pandemic.
As well as decreased consumption.
It is also a place where we can look to buy on the way down.
Lowering our average cost (if we hold a position)
Because we have confidence they will return back to normal prices.
This is what’s called a “stock market sale”
Take advantage of this.
Lowering our average cost (if we hold a position)
Because we have confidence they will return back to normal prices.
This is what’s called a “stock market sale”
Take advantage of this.
Damaged companies on the other hand are different.
Look at Luckin Coffee ($LKNCY) for example.
A 2-year-old startup that was reaching crazy highs.
Turns out that they had been inflating sales by getting affiliating companies to place large orders…
But never delivering them.
Look at Luckin Coffee ($LKNCY) for example.
A 2-year-old startup that was reaching crazy highs.
Turns out that they had been inflating sales by getting affiliating companies to place large orders…
But never delivering them.
They had committed accounting fraud.
So far, 2 board members have resigned.
And they are looking at being delisted.
These are NOT companies you want to buy.
Their reputation is blemished.
And it’s not a stock market sale…
It’s just a damaged company.
So far, 2 board members have resigned.
And they are looking at being delisted.
These are NOT companies you want to buy.
Their reputation is blemished.
And it’s not a stock market sale…
It’s just a damaged company.
Rule #2.
“Have Your Reasons”
Too often I see others buying up stock of a company just because a friend or family member told you to do so.
I’ll tell you a short story…
Ready?
Let’s go
“Have Your Reasons”
Too often I see others buying up stock of a company just because a friend or family member told you to do so.
I’ll tell you a short story…
Ready?
Let’s go
About 8 months ago, I told my dad about Alibaba ($BABA)
An e-commerce platform that dominates China.
I said to him I think this will be a winner in the next decade.
But I also gave him my reasons.
What did he do?
An e-commerce platform that dominates China.
I said to him I think this will be a winner in the next decade.
But I also gave him my reasons.
What did he do?
He didn’t just go and buy the stock right away.
Notice how rule #2 is “Have YOUR reasons”
My reasons just cultivated his interest.
He had to form his own.
And that’s what he did…
Notice how rule #2 is “Have YOUR reasons”
My reasons just cultivated his interest.
He had to form his own.
And that’s what he did…
Two days passed and he had formulated HIS own reasons for why he thinks Alibaba ($BABA) is a winner.
(He used my courses to do so)
I take care of my family…
But the whole point is you should formulate your own reasons.
Why?
(He used my courses to do so)
I take care of my family…
But the whole point is you should formulate your own reasons.
Why?
Because when you come up with your own, you’re more confident in your reasoning.
And when you’re more confident, you can sleep better at night.
Don’t keep yourself awake thinking about if your friend Kevin had actually analyzed the company.
Do it yourself.
And when you’re more confident, you can sleep better at night.
Don’t keep yourself awake thinking about if your friend Kevin had actually analyzed the company.
Do it yourself.
Rule #3.
“Cash is King”
This is a big one.
Sometimes holding cash is the best investment.
Hear me out…
There’s nothing wrong with not liking what you see.
“Cash is King”
This is a big one.
Sometimes holding cash is the best investment.
Hear me out…
There’s nothing wrong with not liking what you see.
Too many times I see people becoming eager to deploy their cash in the market.
If you’ve done your homework.
And you don’t like anything you see in the market.
HOLD. YOUR. CASH.
If you’ve done your homework.
And you don’t like anything you see in the market.
HOLD. YOUR. CASH.
There’s nothing wrong with having a little patience.
It all goes back to Rule #1.
Buying damaged stocks.
Wait it out.
Look for opportunities.
Don’t get influenced by the little voice in your head telling you that NOW is the best time.
It all goes back to Rule #1.
Buying damaged stocks.
Wait it out.
Look for opportunities.
Don’t get influenced by the little voice in your head telling you that NOW is the best time.
Speaking of homework…
I’ve put together a course that will help you with that.
You’ll learn how to:
- Identify damaged stocks
- Formulate your own reasons
- Know when to hold in cash
I’ve put together a course that will help you with that.
You’ll learn how to:
- Identify damaged stocks
- Formulate your own reasons
- Know when to hold in cash
When you’re ready to become the investor you were meant to be.
You can check it out below https://bit.ly/dividendmoney
You can check it out below
https://bit.ly/dividendmoney
