I have a college degree
But I've learned more about investing from making mistakes than I did in school
Here are 7 lessons that will make you a better investor:
But I've learned more about investing from making mistakes than I did in school
Here are 7 lessons that will make you a better investor:
1. The P/E Ratio sucks as an indicator for a majority of companies.
The companies need to be a mature and fully-profitable for the p/e ratio to help us.
The companies need to be a mature and fully-profitable for the p/e ratio to help us.
2. You should only study and invest in stocks/sectors that you understand.
If you don't understand anything about semiconductors, you shouldn't $AMD
Buy what you know and understand.
If you don't understand anything about semiconductors, you shouldn't $AMD
Buy what you know and understand.
3. Invest in CEOs that have a majority of their net-worth in the stock and are incredibly passionate.
I want a CEO with MEGA skin in the game.
Pro Tip: Founder CEOs are usually the best
I want a CEO with MEGA skin in the game.
Pro Tip: Founder CEOs are usually the best
4. NEVER make a decision based on the stock price.
If a business is making tons of profits, the stock will eventually go up.
In the short term, profits and stock price are not aligned. However, they are aligned in the long term.
If a business is making tons of profits, the stock will eventually go up.
In the short term, profits and stock price are not aligned. However, they are aligned in the long term.
5. Selling a HUGE winner early is much worse of a mistake than holding a loser to long.
Warren Buffett rarely sells big winners.
"Why would I sit Lebron James to play bench players?- Warren Buffett
Warren makes a great point with this basketball analogy.
Warren Buffett rarely sells big winners.
"Why would I sit Lebron James to play bench players?- Warren Buffett
Warren makes a great point with this basketball analogy.
6. βThe greatest investors make large concentrated bets; where they have a lot of convictionβ - Stanley Druckenmiller
Warren Buffett, Carl Icahn, George Soros, Druckenmiller, Paul Tudor Jones all make concentrated bets in high conviction plays.
Warren Buffett, Carl Icahn, George Soros, Druckenmiller, Paul Tudor Jones all make concentrated bets in high conviction plays.
7. Doing nothing is almost always the best decision.
The stock market will always go up in the long term.
Buy undervalued great companies, hold onto them for a long time.
The stock market will always go up in the long term.
Buy undervalued great companies, hold onto them for a long time.
Thank you for reading!
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I tweet things like this everyday to help people create generational wealth
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