I have written before that sometimes post that I write are inspired by comments I receive on some post. This post is one example of that. I have also written that I sometimes write post that I refer back to and gather my thoughts in one place on a topic.
There are times I scroll the traffic tab to see what people are looking at in the way of post that have been written. This one caught my attention when updating a comment on a recently written post. This blog is over 15 years old and a blog I wrote is one of my all time top popular post according to ActiveRain which shows on side panel when viewing a post there is the recently written post section but then also popular post section with thousands of views in less than 3 weeks.
It linked to my post about the Silicon Valley collapse and what happen where I mentioned
"I really got into investing when I had my first company video game store at 16 and into my name at 18 just before the tech crash my first attempt was to buy the shovel they all said well I picked up the coax cable through corning GLW a 80% + decline this was with good buy ratings and featured constant with exposure on CNBC. That was my first exposure to watching and investing in the market with a freeze on credit to tech and tech related companies."
We are seeing record low IPOs coming to market this year, we are also watching a credit crunch by all reports on venture capital and startups. I have written recently about the U.S. government debt along with banks and Fannie Mae, Freddie Mac all being downgraded by credit rating agencies. There have been analyst on CNBC that have been predicting a recession for years now. There are some that say with lumber coming down in price with other commodities, layoffs happening in tech and other sectors that we are already in a recession. There have been a good amount of companies that had bad earnings this year.
The 10 things I wanted to point out is what I have learned over the years this is not financial advise I am not doing stock picking here to say buy this or that just sharing what I have picked up over the years. I did close out my account in my early 20's mentioned above unfortunately but started on retirement in my early 30's again with new accounts being invested again starting again in 2014 in the market.
1. There is always a bit of luck in what you get into, its good to realize that and think about most of the s & p 500 looking at 10 years ago compared to today most don't exist anymore. When they say diversify that is the best thing that I have had recommended to me I have seen most say dont have over 5% in any one stock. There are many things that can happen to a company, oil spills, hurricane any natural disasters fires all can hit traditional energy companies. There can be 3m with chemical lawsuits that have taken place for chemicals getting into ground water the forever chemical for example. People who bought cigarette stocks years ago thought its something people would use forever and at one point think about doctors recommended them for your health. You will also hear some suggest not having many stocks in your portfolio so you can learn and know what they do and their product if you dont have much time to follow them.
2. I watch Jim Cramer for entertainment purposes he once in awhile has something of common sense that he brings up, I take all he says with grain of salt as he recommended say Coinbase up to 475 when everyone was buying and a year later just said I got it wrong, I also like he admits he got it wrong. I learned how much my financial advisor charges for buying a stock and selling of stock when looking at if I want to hold or sell something also, you have the right to buy something and sign a waiver if you really believe in it. There is one of my best trades was buying Facebook in the last year when people dumped it I had to sign a waiver for example. I also get a newsletter from Susie Orman and followed her advice to get back into investing and setting up low cost IRA.
3. If something is shorted on shares over 10% find out why before you think of buying it and know why its happening.
4. Dont reach for a yield on dividend if its looking too good to be true it might just be that. If they are having to pay a high dividend is the business growing why are they paying that to retain people interested in the stock, good to look at all risk I like dividend stock and I am a value investor mainly.
5. If a CEO resigns quickly sell the stock and figure out whats going on later. If it turns out to be nothing you can get back into the stock but I have seen that go bad too many times.
6. I have written before about Warren Buffett https://activerain.com/blogsview/5787199/berkshire-hathaway-on-cnbc-warren-buffett I think its a good idea to list to his recommendations on how to approach investing he has had the best return for the longest period of time with his company, just a extra note https://activerain.com/blogsview/5787207/berkshire-hathaway-on-cnbc-charlie-munger never bet against American companies as a whole and know the product your investing in buy something you use everyday can sometimes be solid.
7. Always good to know what markup the company stock your buying into has https://www.barrons.com/articles/goodwill-write-offs-51555531363 If you have a company that is luxury brands understand what the slow down in China in retail is about right now for example. I would look at the older movie China Hustle and look at accounting standards and laws for any countries stocks you might invest in.
8. Have an understanding of what price to earnings is find a site you like that features that information at a minimum I like Schwab resources, I think putting just a little or what you can afford to in an account there to use their resources on learning about stocks, you can also look at https://activerain.com/blogsview/5807090/i-have-recently-joined-stocktwits Marketwatch and others.
9. Look at a companies price to book https://www.investopedia.com/terms/p/price-to-bookratio.asp I like Investopedia when looking up terms.
10. Look at the 52 week high and 52 week low, I go further than that and look at 5 years chart to see for example how did it react in the covid market, where did people have belief at the bottom when Russia invaded Ukraine for example is important to me to judge and get an idea of where it might fall in the future if things go bad for it. I understand the highs of stimulus money pumped up stocks and I try to factor that too. I think try to buy stocks you believe in and like for example I wouldnt buy Exxon even when they were beat up and obvious that they would have a good return and I wont buy certain companies that produce things I feel violation peoples right to search and seizure with some tech companies. I had a second thought on buying Facebook given their manipulation of peoples feed to make them sad and impacts on kids at this point I feel those still using it understand the products and thats not a secret anymore like it once was.
This is not financial advise as the title of this post says NFA, also do your own research DYOR this is what I have done and writing this as I have said to gather my thoughts and look back at a post. If your wondering I have had an approximately 15 % return per year over the last almost 10 years with following the above but I am not recommending any certain stock to buy here or sell.
If you have any things you use and would of added to the list please drop a comment and let me know.