Don’t Invest In Stocks Until You Hear These Golden Rules!

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MBA 38 | Invest In Stocks

Looking to invest in the stock market but don’t know where to begin? In this episode of Minority Business Access, host Solomon RC Ali, along with YouTuber Jack Chapple, breaks down the non-negotiable rules of smart stock market moves for beginners. Whether you’re in your early twenties or late sixties, you’re never too young or too old to invest in stocks. This latest episode covers the value of having “safe stocks” in your portfolio, how to invest early at a discount, earning dividends and gaining compound interest on your money, why triple-digit returns should be your gold standard, and how doing your due diligence quells stock market anxiety and keeps you in the game. Also, why you should never invest in a stock and only invest in a company, and more in this episode!

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Don’t Invest In Stocks Until You Hear These Golden Rules!

We’re going to continue to talk a little bit about stocks for investing in stocks and things of that nature for beginners because a lot of people want to know, “I’ve got a few dollars. What do I do with my money and how do I make some great returns? I’m happy and comfortable with my job doing what I’m doing.” They’re working a job and they’re like, “I’m good for right now. I want to make extra money on the side,” so they can pay for the kids to go to camp or pay extra medical bills. We’re going to try to cover some simple stuff that you can do and invest in. We’ll always talk about how to determine which company to invest in, what to look for, the fundamentals of the things that we look for at Solomon RC Ali Corporation. My team and I, what we look for to invest like the management team, arranging the capital, reinvesting in the business and the industry itself to double or triple-digit growth.

We’ll talk about those things as well. When you’re investing in a stock, what does the volatility look like, when should you be concerned about the volatility? That’s another thing that’ll be important. Right now, we’ve got a video that my team went out and found for you to talk about. The guy’s name is Jack. He talked about investing for beginners. They brought it to us and he’s good at what it is that he’s doing currently. Everybody’s excited about it. My team is excited about it. They believe this will be a big benefit and help to minority business access for people who are looking to make investments. Let’s see what’s going on.

“What we are going to be talking about is how to invest in the stock market for beginners. I’ve invested a lot of my money. In fact, I’ve invested most of my money in the stock market over the past several years because I am 22 and I’m a pretty good investor. I’ve only lost on one deal and I’ll explain what that deal was and why I had to lose money on it. We’re going to talk about some basic principles that I wish I knew when I started out. I was researching when I was sixteen and then I eventually was able to invest when I was eighteen. I knew what I was doing when I started.”

I want you to understand the importance of this. He started when he was sixteen. I didn’t even know about the stock market or what the stock market was at sixteen. All I knew is I wanted to be an entrepreneur and make $1 million. That’s all I knew when I was his age. It doesn’t matter how young you are now. He’s 22 and he’s doing a pretty good job. I’m 56 and I’m learning from this guy a few points. No one is too old to learn or too young to learn. We can learn from anyone. It doesn’t have anything to do with age. Don’t be intimidated that you might think you’re too young or you might think you’re too old. You’re not, just be willing to learn. Come with the right mindset, come with the right attitude and acquire some knowledge that you can use to pass on to your family and to your friends. Being willing to acquire some knowledge. Back to the video.

“Some basic principles. I’d like to start out with a quote from Warren Buffett. I’m paraphrasing, but he says something along the lines of, ‘Invest in the stock market as if it wouldn’t reopen for ten years.’ That’s the perspective I take. Invest in companies that are going to be good in the long run, no matter what. We’re going to be getting to all this. Invest in good, safe companies and you’re going to be fine. Buy safe stocks. What do I mean by safe? My recommendation that I tell all of my friends who I’ve helped start investing is at least 80% of your stock investments should be in some safe stock that you know is not going to go to zero at any point in the next ten years.

MBA 38 | Invest In Stocks

Invest In Stocks: Be willing to learn. Come with the right mindset and the right attitude, and acquire some knowledge that you can use to pass on.

 

What companies would that be? The first example is the greatest stock of maybe all the time in my mind is Coca-Cola. They increased their dividend every single year essentially. The stock has always essentially gone up. It’s gone through cycles. It’s gone up over the past several years pretty steadily. Stocks like Coca-Cola and Canadian banks. I know in the USA, banks aren’t too safe, but certain banks are good, ETF funds. I’ll explain what those are. What ETFs are, it’s a collection of stocks. Let’s say you want to invest in the real estate market through stocks. Instead of investing in one company, you can invest in an ETF which stands for an Exchange-Traded Fund. Essentially, you’re betting that the real estate market will do well because the ETF is invested in all of the real estate markets. That’s pretty much what an ETF is. Don’t invest too much in the tech industry because that’s risky. Let’s say you want to invest in the banking and financial industry, go and buy a financial ETF so that all of your eggs aren’t in one stock, in one basket. Those are some examples.”

He likes Coca-Cola as a safe stock, certain types of banks and the Canadian banks are doing pretty good. A lot of the banks in Europe are doing well. ETFs, I’m not a fan of. They’re okay. They remind me of mutual funds and index. I don’t care for them personally, but it is a safe way to go if you’re apprehensive about the market, you’re not certain, things like that, it might work for you. Investing is about what fits you. What we like to do at Solomon RC Ali Corporation, one, we like safe stocks too. I’m going to say buy safe stocks too. Here’s what I’m going to consider a safe stock. I’m going to flip that verbiage and I’m going to say safe company, because before I look at a stock, I’m looking at the company itself. The company has to make sense, then I’m looking at the industry. The industry must make sense. If the industry is on a downward spiral, I’m probably not going to touch that. If the industry looks like it’s going to have an upper trajectory, we’re probably going to look at that industry.

If the company looks like it can do a double-digit or triple-digit growth, we’re going to be looking at that. I don’t mean double-digit quarter by quarter. Everyone knows that we like stuff long-term. We’re looking at anywhere from 1 year out until about 5, 6 years, a minimum. That’s what we’re looking at, long-term because stocks go up and down. When you do your due diligence, the thing that you will find is that you can pretty much time the market, and you can sit there with confidence. You can have a cold glass of Coca-Cola. You can have a cold beer. It doesn’t matter because you know that you’ve done the homework that’s required to hold your position so you’re not getting off your position too easily.

If you’re an athlete, if you’re prepared, if you’re doing the exercise, you’re doing the workouts, when you hit the field, you’re ready, but if you’re not, then you hit the field, you’re going to get tired and exhausted. You’re not going to perform as well as you should. You’re not going to perform as well as everyone else’s performance because you didn’t put in the time to prepare. It’s the same in buying stocks. Before you buy a stock, you’ve got to buy into the company’s vision, the company’s management and the company’s history, as well as where the company is going. Let’s go back to the video to share that. Again, before you buy a stock, you need to buy into the company itself, which means do your homework, do your due diligence, know about the company. Otherwise, buying the stock, you’re just playing chance.

“Buy mostly safe stocks like Coca-Cola and stuff like that. Stay away from speculation.”

He’s saying stay away from speculation and again, your friend comes to you, your brother, your mother and say, “This is a great stock. You should buy it,” or just because a press release came out, all of a sudden you jump in and buy. No, due diligence. Otherwise, you’re gambling with your hard-earned money. If you don’t care about your money, then throw it away. I can come by or anybody can come by and say, “Good stock,” and you jump out and buy it. That’s a fool. Don’t be a fool. Do your due diligence. Do your homework. Take a look at what’s going on. When you know what’s going on within the company, you buy your stock. Get comfortable there first.

No one is too old or young to learn. We can learn from anyone. Don't be intimidated by your age. Click To Tweet

Tech stocks, I disagree with him because I made a crapload of money investing in a tech company. I disagree there, but only because it comes down to this one more time, everyone here, he’s talking to people that’s a little different audience than what I’m talking to. His audience are looking to buy retail stocks. They’re not looking to get in early on the company. That’s important, buying early. If you imagine this being the early stages and you can own it at this price which is a lower price and let’s say here’s the middle stage it’s a wholesale price and then here’s the retail price, if you’re buying it retail, you’re spending more money for the stock. When you join Solomon RC Ali Corporation, here’s what we do. We show you how to buy a stock in the early stages but what we first do is educate you on the companies, on the industry. Once you’re educated on the company, on the industry, you can now pick your stock with confidence because the stocks that we do, you might sit back and say, “That’s not for me.”

You have the knowledge and the expertise combined with what Jack is showing you to go out and pick a nice retail stock, but please don’t pick that retail stock until you do your due diligence because that’s extremely important. When you go to Solomon RC Ali Corporation, one of the things you’ll see is the ABCs. We arrange capital for companies of CEOs who are looking for money. Why are they looking for money? Normally, they’re trying to grow and expand their company. They’re trying to scale it. Don’t you want to be a part of a company that’s growing and scaling especially in the early stages? That’s where you’re going to have a tremendous amount of growth for your money. As they’re growing their business, your money is growing. Those are the companies you want to participate in.

The other thing is we help build wealth. We show you what to do and how to do it. What are those mechanics that you should be looking for in a company so then you look at the stock, you already know it’s a good fit for you? You know why it’s a good fit for your portfolio. When the stock is going down, you sit back with confidence and say, “I’m not jumping out.” If it goes up and you can sit back and say, “It’s going higher.” You will know because you’ve done all your homework because you understood. That’s what we do in helping people to build wealth to understand what it is that we do. How do we make these decisions? The last thing we do is consult. We consult people that are looking to build well, and we consult people who have companies, whether you’re a startup company or whether you are an entrepreneur that’s been in business for 6, 10 years and you’re trying to grow your business.

We give you the strategies that are necessary because we understand a little bit differently than what you’re understanding as far as your day-to-day business. We understand how to go in the industry, what your competition and your competitors are looking for. If you’re looking to invest in a company, what’s one of the things you want? You want to make sure that company is going to be well-capitalized. It’s got to have the money to grow. If they have money to grow and you invested in that company, you’re going to share in their growth as well. What you get as part of the sharing in the growth is you get a huge return on your money. That makes it exciting. We’re going to get back to Jack. He’s doing a fabulous job. I like this guy, especially for him to be so young. He has a lot of experience, it appears, in making the right stocks work for him.

“Let’s call it spec, tech and commodities. Stay away from those when you’re starting out. Unless you’re on Wall Street, don’t buy these for the most part. A lot of people lose a lot of money betting on the tech industry on his tech company. What is speculation? It’s a stock without a dividend in the first place. You’re essentially putting all your eggs in one basket that the value of the stock will go up within a day or a week. If you don’t make money on that, you can lose a lot of money. A lot of people do. Don’t do speculation. Always invest in the long-term or at least middle 2 to 5 years or 5-plus years, or maybe even 6 months. It depends. Don’t invest for the short-term. Don’t invest into a lot of tech companies unless they’re Apple that pays a dividend. Don’t go for gold all the time. Don’t go for silver. Those are cyclical. Those are pretty much speculation. Stay away from those unless you know what you’re doing. You’re a beginner if you’re watching this. This is dividend. Get dividends. Reinvest the dividends. If you invest in a stock, let’s say $100 in your stock, a lot of companies will pay you a certain percentage for investing in the company. It’s a way of driving the value of the stock up.”

Dividend stocks are good stocks, however, dividend stocks are also normally more or less your blue-chip stocks, your well-known stocks. The stock price is going to normally be a lot higher and can range from $20 up to $300 or $400 per share, depending on what company. Keep that in mind. I shared something before. Dividend stocks are good stocks to invest in. The only problem I see with dividend stocks, if you can get dividend stocks and you have enough money, go ahead and buy dividend stocks. What I see with dividend stocks is that dividend stocks, you won’t be able to stretch your money as far. It’s important to be able to stretch your money far. If I have $10,000, it’s only going to get me 1,000 shares of a dividend stock. I will rather pass on that if I can go ahead and invest in a company and get $2 million or $3 million shares, and that company has a chance to go up and it’s priced 3% to 5%. I’m going to make more money that way because the shares are what’s going up in its value.

The other thing, if I get a chance to invest early in the early stages, a lot of times I won’t get a dividend because small-cap and penny stocks typically don’t pay dividends. They normally don’t pay dividends, but what they will do is allow you to buy the stock sometimes at a discount to market. A lot of times, small caps and penny stocks will allow you to buy the stock at a discount to market. Let’s say there’s a $2 stock, you might be able to buy that $2 stock for $1.85. That’s a discount to market. That’s a 15% discount, 20% discount. That’s pretty huge. Whatever it is, that’s a discount. If you’ve got a $2 stock that’s trading at $2 and you’re able to pick it up at $1.85, that’s a nice discount. You’re roughly right there at about a 7.5% discount. That means you got 7.5%. If you were to equate that to a dividend, you got a 7.5% dividend on buying the stock.

MBA 38 | Invest In Stocks

Invest In Stocks: Buy safe stocks. Invest in at least 80% of your stock investments that is not going to go to zero at any point in the next ten years.

 

That’s what you want to look for. Dividends are great, don’t get me wrong. The only thing sometimes with dividends, you’re going to pay a lot more for the stock itself to receive that dividend, so your money is not going to go as far if you can find the right company. I don’t like saying invest in stocks. I like investing in companies. If you find the right company and you invest in the early stages and you can buy the stock at a discount, it’s the same thing as getting a dividend. In fact, it’s even better than getting a dividend because the dividend normally pays out once a year. If you buy something at a discount right up front, you can turn around and sell it tomorrow. You would have made automatically a 7% return on your money and less than 24 hours. Please keep that in mind.

He’s doing a nice job in explaining it. I’m going to let him go ahead. I wanted to give you a different perspective or point of view. No point of view is better than the other. It’s what your preference is, what may work for you, but in all things, what you do have to do, I don’t care who’s telling you, you’ve got to do your homework and due diligence. Homework and due diligence are interchangeable that mean the same thing. Investigation is another thing. If I say investigate, that means homework, that means due diligence. Those are the same thing. Please do your homework. Do your due diligence. Do your investigation. Know about the company. If you know about the company, you’ll know how to pick the stock and see if it’s for you.

“Let’s say it’s $100, it’s a bank and they pay back 4%. Every year for every stock of the $100 stock you own, you’re going to be getting back $4 no matter what. Those stocks are usually safe. High dividend stocks are not safe. Usually, the middle-range banks are pretty safe for the most part, in Canada at least. The greatest power in finance is compound interest. What do I mean by that? All the dividends you get, if you were to reinvest them into other dividend-paying stocks, it’ll increase the overall value of your portfolio and you’ll be getting back more dividends every single time you reinvest. I read a study, people who invest in the stock market and reinvest their dividends, they can earn over $1 million more in their lifetime than the people who get their dividends and spend it on random stuff.”

Reinvesting a portion of your money, how do you do that? Let’s say I made an investment of $10,000, my investment paid off, I was able to double my money, I have $20,000 now sitting in my brokerage account. I would probably sell 50% of my investment. I would probably keep 50% there. In other words, my original investment of $10,000, I’m going to keep that value sitting there in that account. I’m going to let that ride, turn around and take my profits of $10,000, and look at one of my other companies that I have been doing my due diligence on and say, “Do I want to invest in this company?” I might take my number two company and my number three company that I’ve been doing due diligence on, and I might take $5,000 and putting in number 2 or 5 and put it in number three. That’s how you keep rolling.

If you’re repeating the process, number one. Number two, if I’m able to get in on the early stages again, I’m able to get in early, what I’m calling early right now is if right before the company goes public or immediately after it’s publicly traded. If I’m able to get in right there in that sweet spot, I pretty much know I’m going to double my money all over again. That first investment I made where I left my $10,000, it’s probably not going to double again. It’s probably going to continue to move along at a moderate pace, have its ups and downs, but the second company and the third company, if we’re in the early stages, there is a good chance that I’m going to see it double or triple. That’s what I want to see with my money.

Before looking at the stock, look at the company itself, then look at the industry. Both should not be going on a downward spiral. Click To Tweet

I keep taking my profits out and I keep reinvesting into companies that I believe will grow by triple-digit. If they grow by triple-digit, that’s a win for them but I also win if I invested in it. That’s what I’m trying to teach and share with you. It’s not rocket science. It’s exciting once you get into it and get over the fear of doing it, because most of us have fear and we get all afraid like, “I don’t know. I can’t risk the money or do this or that.” That’s why you’re not where you want to be. You’ve got to get over the fear. What helps you get over the fear is doing your due diligence, your homework and your investigation. I’m teaching you something, due diligence, homework and investigation mean the same thing.

Anytime you hear a professional say, “Do your homework,” what they’re telling you is to do your due diligence or your investigation. If they say, “Do your investigation,” what are they telling you? Do your homework, do your due diligence. They tell you do your due diligence. They’re telling you do your homework, do your investigation. Please don’t get thrown by that when you hear people using it in different ways, it means the same thing. What you must do is the homework. It gets rid of the fear because you will get a comfort level in doing it and understanding the business. Understanding why it will grow, why is this industry growing like that? What’s going on in the competition? How the company that you’re planning on investing in be able to outpace and outperform the competition? What do they have that the competition don’t have? What’s their secret sauce? You understand all of that. That’s why it’s important. Before you put your mind on you’re going to invest in stock, put your mind on you’re investing in a company, and understand that company.

“Reinvest your dividends. In the long run, that’s going to be the best thing you can do probably and reinvest your capital gains as well. If you sell a stock for more than you bought it for, reinvest that into another stock. That’s how it should work. Don’t take out all your money and buy a car. That’s dumb. That’s what a lot of people do. What’s next on my list? I said reinvest. This is a basic principle that people do not stick to. For whatever reason, this bothers me. Buy when everyone else is selling. What do I mean by that? Usually, when people are selling, the market is bad, or it’s predicted to be bad soon. Usually, when people are selling, that’s when the stock will be at its lowest. During a recession, when everyone’s selling to get out, to make sure that they don’t lose more money, what happens is you get people that become rich during recessions because the stock only go up from there.”

He listened to Warren Buffett. Everyone who listens to Warren Buffett, they get a little different take. He got something a little bit different. I get something a little different. Everyone gets something different. It’s like we read the book and all of a sudden, because of how our makeup is based on our personal experience or life experiences, we see things differently and we gravitate to that which is more appealing to us. Warren Buffett always talks about when everyone else is selling, you buy. When everyone else is buying, you’re supposed to be selling. Keeping that in mind. A lot of the big boys, that’s what they say. When everyone is selling, you’re going to buy. When everyone is buying, you’re going to sell. It’s very simple. Don’t panic.

What normally causes a stock to start tumbling down or going down? Bad news and something happened within the industry, all of a sudden, the stock is going down. Here’s the thing. What do people do? Panic. Why are they going to panic? They don’t know what the heck they were doing in the first place because they bought a stock that they failed to do the due diligence, their homework and their investigation. Some bad news came out on the industry, on the company, whatever it may be and all of a sudden, people are selling the stock. That’s because they didn’t do their homework, the due diligence and the investigation. It’s important for you to understand that.

What should you be doing? You should be buying. That’s the importance of doing your homework. That’s the importance of not investing in a stock but investing in a company. Invest in the company, not the stock. Stocks are volatile most of the time. You’re investing in people, in the management team, in their ability to execute, to grow a business, to perform on the things that they said they can do. That’s what you’re investing in. You’re investing in their vision. Just because bad news came out, don’t panic or start selling.

“Here’s another thing that I want to talk about. Also, sell when everyone else is buying too. It’s vice versa. If the value of your stock goes down within a week of buying it or a month buying it, or six months, don’t sell it. Under 99.99% of the circumstances, don’t sell when the value of your stock goes down because you get scared. That is the worst thing you can do. You’re automatically losing money. There are certain cases where you should do that. I’ll explain one example that I went through where I had to do that and I had to lose money, which ended up working out well for me.

I’m going to give you an example here. It goes along with this next tip here. Pay attention to the news. It’s a big one. It can save you a lot of money if you do this. I’ll tell you my example first. This was in 2013, 2014. My friend in university came up to me and we were talking about some global crisis. It was Egypt’s revolution. It was around that time. For whatever reason, we got off topic and he brought up the word fracking, and I never heard this word before. I kept asking him about it. He said, pretty much the US, what they want to do, is they want to get more oil by using all this complex system and it’s going to damage all the lands.

I thought of it too. That’s going to be horrible, but I thought of it as, ‘Dear God, the US is going to increase the supply of oil by a lot in a short period of time.’ The value of oil is going to go down. The oil stocks are going to go down. I was invested in an oil company. At the time it was Canadian. It was a station out of Alberta. This was a couple of years ago. It was one of those Alberta oil companies in Canada. Within 24 hours of my friend telling me about this oil fracking and me looking it up, I sold all my oil stocks. All of my Canadian oil stocks were gone within 24 hours. I ended up losing, it was essentially zero. I was invested over $1,000 in that. For a lot of you, 30-year-olds, that’s not a lot of money. For a student, that’s a decent amount. It wasn’t my largest holding at all. I sold all of it. I lost $20 or $50. I remember checking that stock price six months later. I saw this recession coming.

MBA 38 | Invest In Stocks

Invest In Stocks: In stocks, buying shares in the early stage costs a lower price. Middle stages go for the wholesale price and, in retail, require you to spend more money.

 

I took a lot of my money out of my Canadian investments because I saw this Canadian recession coming. A lot of our economy is based off of oil, especially in Alberta. I sold a lot of my Canadian stocks. We got hit pretty hard by this. We were going through a recession right now, America, because of your fracking. I sold all of those and it ended up plummeting. All those prices ended up plummeting just because my friend told me about the word fracking, which I’d never heard before. Stay up for random stuff like that. The other thing too, is it’s vice versa.”

He’s being brutally honest about a mistake he made. If you’re paying attention, you’re starting to get what I’m saying. This is why what we do in Solomon RC Ali Corporation is so important. This is why when we share information on Minority Business Access, it’s so important that you’re listening to it over and over. Here’s what he’s saying. Jack is being brutally honest about a mistake he made. He did not do his homework. If Jack would have done his homework on the company, he would have understood what fracking is. Fracking is water going down at a high velocity to break open the ground so more oil can come up. How do I know this? We own an oil company, so I know that.

If he hadn’t done his homework, he wouldn’t have been in the stock in the first place. He would have been able to know that, and he wouldn’t have had to sell in 24 hours because he wouldn’t have ever been there. I follow him because he’s telling you the truth. That’s what happens when you don’t do your homework. He, by happenstance, his friend in him was having a conversation and it led into that conversation about fracking. He had enough wisdom to jump out of it. Think if he would have done this homework, he would already know, and he could have invested his money somewhere else. He could have been somewhere else.

Doing the homework is important. Homework, due diligence, investigation, they’re all the same thing. Call it what you want, but you’ve got to do it. If you don’t do the work, you’re going to lose your money. Most of the likely, like Jack, I’m not going to have a friend that’s going to walk up to me and spark a conversation about something and then I’m going to think about my stock and sell it. That’s not going to happen. He got lucky there. He could have been wiped out on that one.

Please do your homework. Do your investigation. Follow the management. What is management doing? Who is management? What has management done? Double-digit growth most professionals want, we want what. Triple-digit growth for the company. What do we want? To be in an industry that is growing. Not an industry that is declining, not an industry that is stagnant. We want an industry that is growing. The last thing, we want management to be reinvesting monies back into their company, back into their growth.

As they are growing, you’re being able to participate in all that. Those things are important. Make sure you do it. Keep reading this until you got it. It’ll help you to get rid of the fear. It gets you comfortable making your investments and standing in your position and knowing. There’s no 100% guarantee that anything will possibly work, but here’s the thing, it will get you further along. You will have some that work, some that won’t. Don’t give up on the system of what you’re learning and do it.

“It was several years ago. All my friends pretty much converted from Android to iPhones. Within a month, four of my friends bought the new iPhone. I bought the stock because I was like, “From what I can see around me, their earnings are probably high right now.” I remember two weeks after I bought that, they released their earnings report and the stock increased by $20 within a week’s span. I ended up buying it for $85-ish, it might’ve been $80, something around there, and sold for $131. It was great. Each stock. I probably bought $1,000 worth of them. I ended up making almost 40% or 50% of that investment. It was good. Pay attention to the news, everyone.”

If you do a play like that, there’s nothing wrong with it. If you do a play like that, that means you didn’t have time to do your due diligence. Anytime a company comes out a lot of times where if a new product or a new service or that announces something new that they’re going to do that’s great, the stock will typically go up for a little short time. What is that short period? I don’t know. Neither will you and neither can any other expert tell you. It may go up for a week, for a day or for a couple of weeks. I said it goes up for a short period of time. That should be an indicator that it’s going to come right back down. You don’t want to be in it when it comes down.

If you’re fortunate to be paying attention, you hear a company announcing, and I’ll use Apple like he did. If Apple announced a new product coming out, stock goes up, you better go ahead and jump in it, ride that wave up and get out of it. Don’t be holding it for weeks and for months. Ride that wave up, go ahead and get out of it so when it comes back down, you’re not taking the losses because here’s what’s got to happen. When it goes up, everyone’s excited and thrilled about what happened. The next thing, everybody’s waiting for all of the analysts, all the professionals, what are they waiting for? How well did they do? Did they sell a million units? Did they sell 3 million units or did they only sell 100,000? Did they hit their goals and expectations?

I know some of you are saying they may have exceeded their goal and expectation. Do you want to wait around for that? If you hadn’t done your homework, you don’t know that Apple normally exceeds its expectation. If you do your homework, does it normally not exceed or meet the expectation? That’s how important doing your homework is. If you’ve done the homework, you will know to hold it because you’ll know, “They always exceed their expectations,” so the likelihood of this being the first time they won’t exceed it is slim to none. I can hold the stock. I don’t have to worry about it going down.

What gets rid of the fear of investing is doing your research and due diligence. Understand the business and why it will grow. Click To Tweet

If you do your homework, you will know either to hold it or to sell it. You’ll know if your homework reveals that they don’t ever hit that goal is never as good as they think, their launches, then you know, “I better get out their stock quick.” If you have done no homework, none whatsoever. You’re just a retail buyer, the announcement comes, and you jump in the stock, hold it for a few days and go ahead and take your profits and get the heck out because all you’re doing is playing a game of chance. You’re playing Russian roulette. Take your profits off the table as quickly as you possibly can because you have no idea what it’s going to do. We’ll get back to Jack and we’ll go from there.

“Don’t invest less than $500 at a time. This is simple mathematics. I’m guessing you’re investing through your bank. They have fees. Every time you buy a stock, if the fee is usually $10 if you’re buying domestically and $50 or $200 worldwide, let’s say you’re investing in domestic stock and the fee is going to be $10. If you’re investing $100, you’re paying a $10 fee. You have to bet that the stock is going to pay you back 10% within a couple of years. That doesn’t happen a lot. Invest $500 minimum in one stock at a time because it’ll limit the amount of increase that the stock has to have to make it pay off for you. If you invest $500 in a $50 stock and the fee is $10, if the stock goes up $1, then you’ve already made your money back. If it goes from $50 to $51, you’ve already paid the fee off that you had to pay the bank. Something to keep in mind. This is all the basics that I wanted to go through.”

Look at how many shares you can buy based on what you’re investing. That is critical. He’s playing with retail stocks that are at a higher dollar price than most penny stocks. Remember, a penny stock is anything under $5 shares of penny stocks. I like playing with true penny stocks. Stocks that range from $0.005 up to $0.25, $0.30, $0.40 because I get millions and millions of shares. I can invest $1,000 and I can own 100,000 shares of something. If I’m watching it grow, all of a sudden, that can turn into being worth $5,000 or $6,000 off a $1,000 investment. I’m looking at what is the volume of shares that I can own because once those shares move in price, a small movement in the share price is a magnified movement. What I’m looking for is that magnified movement. That’s what’s important.

I’m not looking to buy a stock at $20, at $30 because if I have $500 or $1,000 to invest and let’s say I buy a $50 stock, that means I can only buy twenty shares. I need that stock to perform if I only own 50 shares. If you understand math at all, you understand that stock has to do well, but if I own 100,000 shares of something and it has a small movement, that company doesn’t have to do well. All it has to do is keep doing what it’s been doing, and that small movement gives me a magnified return because of the number of shares I own.

MBA 38 | Invest In Stocks

Invest In Stocks: When you earned in your first investment with your first choice of company, invest in a second and third company that you have done due diligence on in its early stages.

 

Please keep that in mind. I want to thank you for tuning into the show. It has been wonderful narrating this for you. I hope you picked up some information. Please focus on homework, due diligence, investigation, whatever word you want to call it, because that’s important and will help you to get rid of the fear of investing in what you’re doing. It also gives you a great deal of confidence to be able to stay in your position and not lose money. It’s not that you won’t lose money because you’re not going to get it right every time. There are going to be many things that can go wrong where you will lose money because of what happened but trust your homework. Trust what it is that you’re doing. Don’t be lazy. Do the work okay. In business, a lot of people think you have to do a lot of things, but I’m here to tell you, you don’t have to lie, you don’t have to cheat. You don’t have to steal. You do have to do the work. If you do the work, you will be successful. It’s up to you.