The rules of investing

Discussion in 'Investing' started by TomB16, Jul 23, 2020.

  1. TomB16

    TomB16 Well-Known Member

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    I would appreciate some help with this. Please chime in with your ideas and true-isms. :)

    Rules;

    - Trading is not investing.
    - Never buy a company with bad management, hoping they start making better decisions.
    - Buy a good company that happens to have a decent dividend; ignore the great dividend of the company you aren't familiar with.
    - This week's hot tip is next weeks regret.
    - Not everyone can be above average.
    - Talking about investing to women creates a 24 hour no-romance window to be endured.
    - No one has ever gotten rich using an Internet hot tip.

    Things that sound wrong but can be empirically proven to have merit.

    - Never buy a company headquartered in Quebec
     
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  2. The Brontide

    The Brontide Active Member

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    Good subject.

    I like to think in terms of this:

    Investors - typically long term hodlers and in endice products or long term targeted stocks. Plus dividend trading.

    Traders - rarely day trading but active on the markets and studies the news and data.

    Speculators - in and out on a whim and trading on more rumor and less data.



    Any of those work from time to time for some folks. Some are safer and boring, and some are scary fast movers. I confess I have done all three with varying degrees of successful or not. I try to split my time between the first two.
     
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  3. B Russ

    B Russ Well-Known Member

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    Lmao no romance window.
    I like the thread.

    I will go through some of my evolution, better or worse.

    Talking of terms of investing, not the others mentioned above. I too have been and am guilty of all three brontide mentioned as well.

    know the company u want to invest in.
    Find a sector you like, know, or are passionate about. Understand the driving forces in said sector. Is it a growing sector or dying one? If a strong or upcoming one, find the best company in that sector. Or the ones wanting to shake it up. Learn to read balance sheets if u don't know how. Understand EPS vs forward valuation and how that correlates with the company’s growth history. If its 20x valuation forward, with a history of zero growth per yr, it may be NKLA? Jk. But....not kidding.

    Look for a company (If investing in a company) with a moat. Yes a moat. The metaphorical water and gator filled trench, protecting the castle, or in this case, company, that protects it from invaders stealing marketshare. Ask what sets them apart from the competition in their pool?

    netflix had a moat when they broke into the brick and mortar rentals. Redbox seemed ok as a stepping stone, but its so much easier to not even leave the sofa to rent or return your movie. Then the lack of having to manage millions of drop locations.

    apple had a moat by being the first and most attractive smartphone platform for app developers (thus cementing their lead) in that particular tech race. That made it instantly more attractive to consumers.

    I personally am not worried about dividends. In fact, i prefer i do not get any from companies i am with. My shares are too insignificant to matter to me. But i dont like them taking hundreds of millions and giving them to the other shareholders. Lol. I would rather them reinvest to grow the company. I also am still working. Maybe when im retired, i will view dividends differently?
     
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