My stock pick that cracked 100% in under 12 months
It was great to see so many people relate to the lesson about investing in yourself last week.
I believe it is so important because it can last your lifetime where as investments in stocks, bonds etc. usually have a maturity date.
Before you get too excited by investing, ask yourself:
- Have you cleared that expensive credit card debt? Got debt under control?
- Have you got some cash aside for an emergency?
I want to explain to you how I look at INVESTING. I capitalise that because I want to distinguish it from TRADING which, in my opinion is glorified gambling.
If you want to learn about gambling may I suggest a group...just kidding...focus Luke focus.
I took this screen shot on the 7th of Jan because I knew I could use it for one of these emails.
I put $5k in Meridian energy in May 20 & by Jan 21 I had doubled my money. A 100% return.
I could say I predicted this growth but I would be lying. I had no idea an American fund was going to buy up a portion of Meridian and send the price rocketing. Don't follow US politics enough to know that Biden would get in and fuel more purchasing.
To be honest, I had no idea why it rocketed over a few days until I asked an expert.
I guessed a 15% increase over time & was going to be stoked with that...so I got it really wrong.
I will explain why in another email to give you an example of how I choose stocks.
For now...did I sell and collect my $10k? Making a cool $5k profit in 8 months?
No...because I’m not trading, I am investing. Coulda, shoulda, woulda sucks too.
What an idiot Luke...you could have doubled your money if you sold the shares.
Well great but that’s not why I bought those shares. I bought them to hold and invest.
Let’s look at that $5k today. The shares are not worth $10k today, they are worth $7.7k.
Oh well, I still own them and believe in energy and the company. I’ll hold. I’ll invest.
Plus, that 55% return is way better than the 15% I had hoped for.
You need to get very clear on the difference between investing and speculating Luke because in this stock market frenzy, EVERYONE will have 'a tip' for you.
Remember last week I said humans will chase short cuts. We are hard wired to chase the biggest possible reward for the lowest possible output. Life doesn't always play out that way though does it?
Listen to your mates when they talk about the shares they are buying. Ask them:
- How come you bought that particular share?
- When do you intend on selling it?
See if they have thought about those things because unless they are studying this stuff every single day, there is a high chance they are operating off incomplete information - as we all are.
Trading is like stepping into the octagon so you better have your eyes peeled and know your exits if you want to play the trading game.
If you want to invest every week with your spare cash (effectively what Kiwisaver does for you) then stay calm and see what you can learn from the upcoming emails.
You don't need to overcomplicate it and you don't need to be Warren Buffet to have a crack.
Investing is about YOUR situation and future, not your mates, not mine, not your neighbours.
Leave your ego at the door, your hard wired human traits of chasing shortcuts, you don’t need to be a hero. You need to be calm and consistent over long periods of time - just like you expect the companies you are investing in, will be too.
Did you watch the video I sent out last lock down? If you're keen on investing, you better...
Get curious, not FOMO.
Hey, I am thinking about running a virtual workshop on how to save $10,000 clean in a year. It'll be $63. I'm working on it this weekend if there is enough interest so let me know if you'd be keen - hit reply. (Sorry, it's not for short cut takers & will take a year for most people).
Luke
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__________________________________________________________________________Did you know: Virus fears wiped $393 billion off China's stock market (people selling in fear). $393 billion is nearly 2x New Zealand's entire economy.
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