How the Exact Same Stock Will Produce Winners and Losers

Let me reveal right up front what most inexperienced stock investors fall for:  the buy recommendation.  Whether it’s from a time-tested, reputable service like The Motley Fool, a financial advisor, or from a friend – or a friend of a friend – people who know little to nothing about stocks and the market and investing can get excited as a school kid whenever they catch wind of the next “big” thing to invest in.  Why?  Because they easily get caught up in thinking that it’s a sure-fire guarantee of not only money, but BIG money.  (Believe me, I write this from experience.)

It’s as though they believe the person or entity recommending that particular stock used a special investing-only crystal ball or some other sort of mystical power to be able to predict the future.

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Gambling in Stocks or Investing in Companies?

Several years ago I was in a training seminar and the speaker, who was an engineer with an attitude, an edge about him, was talking about the properties of concrete.  At one point he got very passionate as he explained how you should never call it “cement”.  In fact, he got pretty irate as he lamented how uninformed people call it cement, emphasizing how cement is only one of the ingredients of concrete and not concrete itself.  He said that this would be the same as calling a cookie “flour” when flour is only one of the ingredients of a cookie and not a cookie itself.

The same idea can be applied to all the investment gurus and everyday people out there who use the word “stocks” nearly all the time as their way of referring to companies that trade shares on stock exchanges.  So as not to be labeled a hypocrite, I freely admit that I do this often throughout this blog without first thinking.

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Adventure or Ordeal? Depends Upon Your Perspective

If you were to do an online search for the top ten fears/phobias that people have, nearly every list contains two that relate to a similar thing.  One of the phobias is almost always near the top of the list and that is the fear of heights.  Usually not much farther down the list is the more specific fear of flying.  In other words, there’s something about human nature that has a fear of being too far off the ground.

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Taking the Emotion out of Investing

Even though this is a blog about stock investing, the principles in many of these posts relate and can translate to success in any form of investing in other areas of life:  education, relationships, and so on.  Really, what point is there to becoming a successful stock investor if you can’t also learn things that make the rest of your life better and of those around you?  Although stock investing can be fun and very rewarding once you learn about and understand it, which also involves getting over any myths and hang-ups you might have about it, there are far more important things to life!

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Did You Ride Out the Financial Storm?

A lot has happened since my last post in early October 2015.  Less than a month later, my dad passed away after a 3-year struggle with cancer, but I had been fortunate enough to be able to spend a lot of time with him in those final months.  (As an aside, if a person does not choose to do a lot of reflecting during times like that, trying to ignore the reality of death, then I would argue that he’s missing out on some monumental life lessons.)  So yes, I had to ride out a personal storm, but I also learned and was reminded a lot about life in general.

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Some Crucial Lessons About Buy-and-Hold Investing

One mantra that everybody even remotely acquainted with investing has heard for many years now is “buy and hold”.  I first learned about it over 20 years ago, but I was too impatient to put into practice plus I didn’t have the right information.  Finally, after ‘seeing the light’ upon learning the right information, here are some things I’ve learned since putting it into practice.

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