Good morning fellow HC members, a few insights for a Monday morning
I have been going through a few of the threads for spec stocks I used to hold & have seen very similar themes of poor sentiment. After being around the market for some time, you start to realise that it is just a marketing machine.
If one is going to make money from the market, you must understand what it is you are up against.
Firstly you have to understand that in order for you to make money, someone has to loose it. Ultimately, this is a zero sum game, other than the professions that make money facilitating trade (brokers, market makers, investment banks etc). Because there are participants that make money facilitating trade, it is in their interest to find investors to trade.
Where do you think the concept of becoming a full time trader & sipping margaritas on the beach came from?
Then we have hedge fund & investment fund managers. They need investors in the market with less knowledge, education & experience than they have, so they aren't only passing money between each other.
I have attended many TA courses over the last 15yrs & what I find more astounding than anything; is most of them claim you don't need to know anything about the stock you are buying, you just need to know the technical reason (TA) you have bought it.
The more experienced I have become, the more I have realised this is absolute RUBBISH!! In fact, it is downright stupid!!! Especially in the spec space.
Let me ask you this question, if you don't know what you own, who is in charge of your money?
What influences the price of your stock?
What has happened that caused the chart to let you know its a buy or sell?
In the threads I was referring to earlier, there are always posts where a particular poster is blamed for ramping & costing everyone money.... This is as true as it is false in the majority of cases. In most cases, the SP rose before it fell & when it rose, that ramper also made everyone a lot of money.
Of most importance is the lessons to be learned in these situations.
Do you know why you invested in the company?
What does the company do?
Are management competent & trustworthy?
Is their product or technology disruptive?
Can it be easily replicated?
How hard is it to scale & what is the opportunity?
Very simple questions & there are many more, but when you know the answers & have conviction in your investment, you sleep better at night.
Do you find that you are often the investor left holding the baby? If you are, perhaps there is a better way. Have you noticed there are some posters that are always in the stock at lower prices & out before the price falls?
Compare what I constantly see being taught at trading classes with what most great investors teach - know what you are investing in & invest in what you know.
(20min delay)