Stock market masterclass
Are you ready to learn about the stock market and investing in stocks?
Let’s get into it.
Firstly, I have to make it clear that this blog is not for everyone- it is for those who are seeking to create generational wealth in the stock market.
A quick heads up.
To be a great investor you need many qualities, I’ll kick things off by listing some of the traits that you need in order to succeed in the stock market.
- Emotional stability
- A beginners mindset
- The ability to think independently
These are some of the traits that you need to do well in the stock market, if your able to employ these traits into your daily life. You’ll smash it in the stock market, simple as.
Getting into it further.
How do you succeed in the stock market?
To succeed in the stock market, you need to start with knowing what you understand and what you don’t. The key is in staying within your circle of understanding and the better you are at staying within that parameter, the better you will do in the stock market. So start things off by being ruthless in your self analysis in regards to what you understand and don’t. The rule is simple: Stay within your circle of understanding and you will do very well in the stock market.
Stock investing is simple. Just don’t lose money and you win. It’s that simple. Colleges and universities make it seem like it requires some complex formula or math in order to do well in the stock market. You’ve got to get your head around the fact that stock investing is simple. You simply have to be good at one thing: reading annual reports and understanding business. If you can understand business, you are well on your way to performing well in the stock market.
Why are stocks simple?
The stock market is simple, find a business that is going to perform well in the future, understand it’s future prospects and you win. It’s just that simple guys, I can’t make it any more clear that you just need to understand the future economics and characteristics of the business.
Technology and artificial intelligence is not going to change the way in which we chew gum. So Wrigley’s will stay strong.
Technology and AI, will not change the drinks we consume daily. Hence Coca Cola will stay strong.
Start with sticking to the basics guys, think rationally in regards to understanding how the business will perform in the future and you put yourself in a position to succeed. You don’t need complex math or formulae to do well in stocks. What you need is the traits listed above and the ability to stay within your circle of understanding.
It’s okay if you don’t understand many businesses, you don’t need to. You only have to be right about a few businesses. ONLY A FEW. That’s the key, to succeed in creating generational wealth in the stock market, if your right about 10 businesses in your life time, you will perform very well in the stock market. Stick to these principles and your well on your way to attaining success in the stock market.
How do you find value?
To do well in stocks, you have to be able to spot value and put your money in the assets which are going to provide the most value in business in the future. Value is the key, so how do you find value?
Read annual reports and figure out which businesses are going to be in the game for the long run.
Combine that with patience and you’ll do well.
It’s really that simple.
Get the idea of having to use complex math etc to find stocks. You don’t need it, what you need is the ability to have emotional stability and patience, with discipline in your approach to finding stocks.
The more patient you are, the more you’ll earn.
The more disciplined you are in selecting stocks, the better you will do.
The more emotionally stable you are, the less likely you are to do silly things.
You should not sell a stock because it drops in price or because the market is fluctuating. Short term market fluctuations are going to happen, you need the guts to be able to ride out the short term market fluctuations and you need to be able to apply patience in this process.
To really do well in stocks, you have to be a learning machine- the more you learn, the more you earn. It’s all about learning. The more you learn, the more you will earn. Simple. I hope you are starting to understand stocks a little better with this blog.
Now the real key to success in the stock market:
Applying a margin of safety, what is a margin of safety?
It is simply the difference in price and the value of a stock. The greater the gap is, the more wealth you will create and the safer your money is in the stock market. You want to find stocks which are selling at a discount to what they are worth and you can’t go wrong. If you buy something for cheap enough and hold it for the long run, you do very well in the stock market.
To out perform the market, you have to go against the grain and bet against the consensus. This is not an easy task, since the value is built into the price of a stock. But it is possible, with the right mindset, attitude and approach: you will do very well if you can find gems. They are rare, but you can find them with a disciplined approach in selecting stocks. Stick to these fundamentals explained in this blog and you will do well in stocks.
Thank you for reading my blog,