“Fred, Congrats on Q1. Can you give us some color on the headwinds for the quarter and why comps are down?”
Crikey, that’s a complex question! Only it isn’t; the analyst is simply asking for more details. Why don’t they say that? It ain’t rocket science, and any 10-year-old can understand if they drop the insider talk.
Yet, they won’t. When stock analysts appear on financial channels like CNBC or Yahoo Finance, they appear to speak a higher form of the English language, privy to select individuals — the more intelligent among us.
The insider talk gets worse on earning…
Since 2015, I have grown my money at a compound annual growth rate (CAGR) of 34%. My $5,000 investment will increase to $1.7 million after 20 years.
Before dismissing my success as beginner’s luck in a bull market, note that I have outperformed both the S&P 500 — which gained 11.63% in the same period — and Warren Buffett’s 20.3% record since 1965.
Here are some important lessons I’ve learned along the way.
There is no foolproof strategy — they all have pros and cons. …
Those who can, start businesses, and those who can’t, invest. Entrepreneurs and investors are not one and the same. It took losing €12,000 in a failed business venture to understand the critical difference. It’s money I couldn’t afford to lose — it hurt having to make loan repayments for a business that had already failed.
In 2011, two of my friends and I decided to open an internet café in Harare’s city centre. It’s incredible to think these used to be viable businesses. Yes, we should have foreseen the popularity of smartphones, but we didn’t. …
In the same week that protesters stormed the U.S. Capitol Hill, Tesla stock continued its upward price momentum. It added a further 24% in only a few days of trading in 2021. You would think it’s time to break out the champagne and celebrate. But not quite. This surge in price introduces a dilemma. Should people sell or hold on for more gains?
Is a surge in price a valid reason to sell your stocks?
No-one can predict the short-term market direction with any regularity. Beware of those who have been right occasionally; even a broken clock is right twice…
Not everyone is made of nerves of steel, a 1% decline in the stock price is enough to cause sleepless nights for some people. These worries can cause some to abandon stock investing altogether.
But your worries don’t have to keep you away from attaining financial freedom via the stock market. You can conquer them with experience.
But experience requires you to put some skin in the game, risking getting hurt. No version exists where you can master the stock market without put real money on the line.
It's one of those frustratingly paradoxical scenarios like the requirement for experience…
After five years of hard work, my friend finally got the promotion she deserved. It came with a substantial salary rise, and it was about time. In all her excitement, I advised her to be careful of lifestyle creep — that’s when expenses grow to match her salary increase.
She agreed not to let her expenses balloon out of proportion. My following advice was to start investing her excess money. To which she emphatically said, “no, I don’t want to lose my money; I would rather put it in a savings account.”
I wasn’t surprised at her response; it’s a…
Nothing hurts more than seeing stocks you have sold perform well without you. It’s the same sinking feeling you get bumping into your “ex” at the shopping mall. To see them thrive without you makes you cry inside. Outwardly you might say, “I’m thrilled for you,” but inside, you are full of regrets.
That’s the response I get each time I glance at Docusign, Chipotle, Mercadolibre — they have at least doubled from when I sold them.
Unfortunately, this particular regret is familiar to most investors. Even legendary investor Peter Lynch admitted that “his biggest mistake was selling too early.”
Investing hacks to help you increase you capital gains
In 1989, Warren Buffett phoned Peter Lynch to ask for permission to quote a sentence from his book “One up on Wall Street.” The quote was to be included in Berkshire Hathaway’s annual shareholder letter.
“Selling your winners and holding your losers is like cutting the flowers and watering the weeds.”
The core of the advice is to hold on to your best-performing stocks and sell your worst-performing stocks. …
Confession time — I started my investing journey as a fan and not an intelligent investor.
I was introduced to the world of stock investing via a book called Rule #1 Investing by Phil Town. I liked the book so much; I started listening to his weekly podcast. From the podcast, I caught wind that he and another famous investor, Mohnish Pabrai, were investing in a company called Horsehead Holdings. So, like a fan, I invested in the company as well.
It was a foolish move on my part. On Feb 2, 2016, Horsehead filed for Chapter 11 bankruptcy. It…
When is the right time to exit a sinking stock?
The other day, I received the dreaded email. One of my stock positions had “depreciated by a minimum of 10% from its initial value”. Translation — the sky is falling. What are you going to do about it?
Is this the beginning of the end for Peloton, as the naysayers have forecast? Or will they make a comeback like Muhammad Ali in the 1974 Rumble in the Jungle fight against George Foreman?
I opted for the latter and bought a few more shares (*not investment advice).
Here are the steps…