Good morning, friends!
The information we brought you today will save you a lot of very expensive tuition money!
We have compiled for you the 7 most common mistakes that cause 90% of people in the stock market to lose a lot of money day after day without understanding why!
Our goal today is to allow you to rise above the mistakes of others and learn from their mistakes:
Let's begin!
Mistake No. 1 - They make false assumptions: They think that if a stock has fallen by 50%, it must return to its price - in fact - it must double its price to compensate for the loss!
Finding the next Microsoft is a very, very difficult task - the facts prove that it is much more likely they will pour their money into a company that will fail - rather than one that will change the world.
Mistake No. 2 - They repeat mistake No. 1 again and again: They are sure that 'this time it's different' - this is the most expensive statement in the stock market - in fact, the statement that cost people many losses is - 'this time it's different'.
Mistake No. 3 - They fall in love with the product: Really? Excellent products do not necessarily lead to large profits...
Let's bust this myth once and for all - companies that produce excellent products are not necessarily good companies.
And sometimes - behind the good product, one day it is discovered that profit margins were small and competition? Fiercer day by day - moreover, it is never easy to earn sustained profits.
They think a great product = an excellent company - sometimes every hundred = the trap of the century.
Mistake No. 4 - When the market falls, they panic: It takes courage to reap rewards, but that courage comes with prizes - if you manage to think outside the box - think for yourselves - and discover stocks of truly good companies - that have been abandoned by others and appear cheaply in the market - your investment returns will improve even further!
Mistake No. 5 - They try to time the market again and again:
Really? Among the thousands of funds Morningstar tracked over the past 20 years - not one provided consistent market timing!
Mistake No. 6 - They ignore valuation: When they buy stocks of a large company - they buy false hopes that other investors will pay a higher price even though this is sometimes unjustified and many companies that were very large in the past - are very small in the present.
Mistake No. 7 - They rely on earnings per share: Ultimately - in investments - what matters is cash flow, not earnings per share.
If cash flow decreases despite increased profits - this is evidence that something (probably) is broken behind the scenes...
And if we want to pinpoint their most common mistake...?
Well - they follow public opinion and two-bit YouTubers who put nice scenery in their YouTube videos - and turn them into their gurus!
Following public opinion or such gurus is the safest and most common way to incur significant financial losses in the stock market.
Large profits are not made by buying what everyone is talking about - but by buying what everyone disregards.