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What’s The Hardest Part About Learning How To Invest?

By  +Follow December 9, 2013 3:32PM
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The hardest part about being a member of the value investing school in a rising market is sitting still.

When markets rise like they have this year then inventory pool shrinks pretty rapidly and there is not a lot to do.

The few opportunities that exist can be bought and then it all becomes about sitting still and letting the value of your holdings become recognized by the market. Strong markets are a great time to catch up on your reading or indulge in some much needed recreation time. If you have done the buying part of the equation correctly and purchased shares at a significant discount to asset value it becomes all about the waiting game.

The waiting game can be very difficult at times.

Look at some of the news headlines from around the web today. Carl Icahn is fighting with Apple over a buyback. Is Bitcoin the new gold? We will taper? When will we taper? Is China expanding or contracting? Wasn't that a great jobs report today? What's the dollar doing? Sears (SHLD) is spinning off Lands End. Is Facebook going to be a Dow stock someday? All the news flow and questions come at you at a rapid clip from the TV, the internet and even the newspapers for those who still get their news and information via dead trees.

Then you have to face the siren song of the touts and bookies that surround the market. Try my simple system that will make you thousands a day with no effort. Get in on the next big thing. Buy gold to profit from the end of the world as we know it. Buy these penny stocks now to benefit from the coming wave of cold fusion. The Never Wrong Fund is up big this year. Better buy now. Our research department thinks this stock can moved from 20 to 22 over the next year.

That's 10 times the T-bill rate so you should pick up a thousand shares today.

If all that's not enough you have all your friends and relatives adding to the pressure to do something. Your golfing buddy's uncle knows a guy who is a big shot at Goldman (GS) who told him that that Twitter (TWTR) is going to $1000 and you should get in now. Everyone in the book club thinks this Tesla is a good stock because electric cars are really green and green is a good thing for the future.

Your spouse wants to know how come you don't own Amazon (AMZN) in your IRA because you buy stuff there all the time. Your business partners met a guy whose kid made a fortune with something called candlestick charts and thinks maybe you should look into that stuff. The neighbor is trading options in his spare time at home after he's done with patients for the day and expects to retire soon from this endeavor.

It can be maddening.

It is enough to make you miss 2010 when no one wanted to talk about stocks and you were left in piece to accumulate little banks and REITs trading at half of book value. Even worse it can have you questioning your philosophy and process. Maybe you should see if you can use those candlestick cloud things to tell when cheap stocks are actually getting ready to move. That would sure improve performance. Maybe a little Amazon would be a good idea. After all you just did all your Christmas shopping online. Hey! I bet that's good for FedEx (FDX) as well. It is very easy to get distracted and wander out of class at such times.

In the long run none of this stuff really matters very much at all and it takes discipline to ignore the temptations and occasional doubts.

In the world of investing there are only two questions that really matter. Is this stock cheap when you compare the stock price to the assets of the underlying corporation? When you look at the balance sheet is this stock safe. Do they have adequate resources to pay their bills and survive long enough to thrive again? Those are the only two questions that really matter to those of us in the deep value school of investing. Answering those two questions will render all the other questions and exciting offers pretty much irrelevant. The difficult part is ignoring the noise and all those well-meaning folks who don't get the basic businesslike concepts of value investing.

Tim Melvin is a value investor, money manager and writer. He has spent the last 27 years in the financial services and investment industry as a broker, adviser and portfolio manager. He has also written and lectured extensively on the markets with his work appearing on RealMoney.com, DailySpeculation.Com as well as several print publication including Active Trader and the Wall Street Digest. Learn which 3 low risk, high yield stocks Tim owns for the trade of the decade.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


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Results for shld
Alpha Maven Alerts
2 Sep 14 13:11:52
$SHLD, Negative, Yesterday, SD -2.48, #NASDAQ #ConsumerServices
Market Int Center
2 Sep 14 12:56:35
Sears $SHLD Trading Near $36.37 Resistance Level ( http://t.co/CV3KefTFKu )
Bulls vs Bears
2 Sep 14 12:46:42
$SHLD: What Sears Could Do to Fix Things: Borrow, Sell, Spin Off http://t.co/xFUb4AaBIh http://t.co/8PSMo0ewxf
David Laurent
2 Sep 14 12:32:31
@hmeisler Dear Mush - Can you please send out some positive comments on the market. also, really looking for support on $SHLD $SPY
StockExpert
2 Sep 14 12:19:30
$ISNS Tiny Float Huge Volume 20$+ Coming?? NO Thats What they said about $DGLY Also $wmt $KO $TSLA $AMZN $SHLD $JCP $PLUG $SIRI $GE $TASR
Media Sentiment
2 Sep 14 12:08:49
$SHLD received a new alert. Find out why at http://t.co/5udYd0Ofs6 #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 353
strader55
2 Sep 14 11:08:26
nlightn: $SHLD,....At the end of the day, Sears Holdings - nlightn http://t.co/k4iFinkDcY
Perfor Mance
2 Sep 14 10:52:11
Option Millionaires: nlightn: $SHLD,....At the end of the day, Sears Holdings http://t.co/MhtHHnZzLw
Financial Updates
2 Sep 14 06:46:38
$SHLD: Sears Holdings Corp (SHLD), AutoNation, Inc. (AN) Lands' End, Inc. (LE ... http://t.co/0dntC4weVY http://t.co/Fjb6t1xl0N
JasonRaznick
2 Sep 14 06:30:09
RT @Benzinga: Who's Going To #Shop At #Sears? $AMZN $COST $SHLD http://t.co/okE0hc8x3M
Zubeyr Kamil Açıksar
2 Sep 14 06:15:11
RT @Benzinga: Who's Going To #Shop At #Sears? $AMZN $COST $SHLD http://t.co/okE0hc8x3M
Benzinga.com
2 Sep 14 06:14:15
Who's Going To #Shop At #Sears? $AMZN $COST $SHLD http://t.co/okE0hc8x3M
Harry Walkman
2 Sep 14 06:01:00
$SHLD Sears' Second-Quarter Earnings: Expect Losses http://t.co/B106pAYxoB
Thomas Collins
2 Sep 14 06:00:59
$SHLD Sears - How Long Can It Survive? http://t.co/9RGAQAgKXf
Paulo Costa
2 Sep 14 05:35:08
RT @KaderChris: Bright future for $SHLD: -shift all product sales online - physical stores repositioned to product service/repair/informati…
Chris Kader
1 Sep 14 18:03:16
Bright future for $SHLD: -shift all product sales online - physical stores repositioned to product service/repair/information
Chris Kader
1 Sep 14 17:25:28
@optionmonster @jonnajarian. Jon. $SHLD bull case intact. Service lines have high potential value. Reposition physical stores purely as
Financial Updates
1 Sep 14 15:46:56
$SHLD: Who's Going To Shop At Sears? http://t.co/dYVagDO3zn http://t.co/jwojlBRuRU
Mr.Incredible
1 Sep 14 15:30:48
http://t.co/LE8oSDfs80 Verified $387.47 loss in $SHLD so boring trade ended with a small loss
strader55
1 Sep 14 15:06:05
nlightn: $SHLD,...Sears Holdings: Cost Burdens Weigh On The Stock http://t.co/MohZGSbYbo
Perfor Mance
1 Sep 14 14:54:38
Option Millionaires: nlightn: $SHLD,...Sears Holdings: Cost Burdens Weigh On The Stock http://t.co/1PY3mtx6kg
OTPicks.com
1 Sep 14 14:49:45
nlightn: $SHLD,...Sears Holdings: Cost Burdens Weigh On The Stock: nlightn http://t.co/pm15OeqcDh
Jeffrey Blake
1 Sep 14 13:30:52
$SHLD Sears - How Long Can It Survive? http://t.co/cM9D2mn0zG
Joe Attrux
1 Sep 14 07:57:54
RT @SeekingAlpha: Sears Holdings: Cost Burdens Weigh On The Stock http://t.co/8FwS2N8Brm $LE $SHLD
Chris Kelly
1 Sep 14 07:17:04
Sears Holdings: Cost Burdens Weigh On The Stock http://t.co/FXZ9yF3utl $SHLD, $LE
Seeking Alpha
1 Sep 14 04:36:49
Sears Holdings: Cost Burdens Weigh On The Stock http://t.co/8FwS2N8Brm $LE $SHLD
Alpha Maven Alerts
30 Aug 14 21:11:57
$SHLD, Negative, Yesterday, SD -2.23, #NASDAQ #ConsumerServices
Financial Updates
30 Aug 14 08:46:40
$SHLD: Sears Holdings Corp. Director Buys $33300 in Stock (SHLD) http://t.co/JbT3x7MnPX http://t.co/7BwN64CO2S
Rick  dan
30 Aug 14 08:14:35
: 25 stocks sell now lot of down side risk $PLCE $RSH $RL $SHLD $CMG $BWLD $TSN $LMT $BA $CRM $SGEN $RIMM $FB $CYOU $STP $SNDK $WDC
Business News Watch
30 Aug 14 07:46:37
$SHLD: What Sears Could Do to Fix Things: Borrow, Sell, Spin Off http://t.co/W4luvVivKJ http://t.co/glE9dyXEHf
awolam
29 Aug 14 16:16:44
RT @SeekingAlpha: Sears Should Reorganize Its Operations Along Merchandise Lines Into Separate Subsidiaries http://t.co/bmxbfYyfNH $SHLD
Seeking Alpha
29 Aug 14 16:13:12
Sears Should Reorganize Its Operations Along Merchandise Lines Into Separate Subsidiaries http://t.co/bmxbfYyfNH $SHLD
Business Updates
29 Aug 14 13:46:44
$SHLD: Sycamore Considers Bidding For Sears Canada http://t.co/K8BPbp0keP http://t.co/4b21KfjtFJ
Wall Street Monitor
29 Aug 14 12:46:46
$SHLD: Sycamore Considers Bidding For Sears Canada http://t.co/rH9qdSn4Tq http://t.co/D69PDECjfq
Bio_n_tech
29 Aug 14 11:51:32
Trimmed 20% of $nxpi profit taking-Still overweight position for me. 50% of proceeds added to shorts ($lulu, $shld, $tna) rest keeping cash.
Read_this_n0w
29 Aug 14 11:23:28
sold my $SHLD 35puts .47avg avg from .18 entry
Mike Kellams
29 Aug 14 09:19:07
RT @jessicawohl: Sears to cut $37 monthly subsidy from certain retirees' health plans, saving $6.2 million a year http://t.co/WnL0xiIS9l $S…
Jessica Wohl
29 Aug 14 09:18:19
Sears to cut $37 monthly subsidy from certain retirees' health plans, saving $6.2 million a year http://t.co/WnL0xiIS9l $SHLD
Pristine Trading
29 Aug 14 09:00:51
$SHLD looks like it is headed lower next week #stocks #stockmarket
John Turner
29 Aug 14 09:00:42
$SHLD Insider Buying Should Not Raise Investor Confidence About Sears http://t.co/29GfgFUZNP
Stock Updates
29 Aug 14 08:46:47
$SHLD: Insider Trading Alert - WYN, WCN And SHLD Traded By Insiders http://t.co/bCgUYKmlTg http://t.co/sDlh61amHn
Caroline Vanderoef
29 Aug 14 08:29:48
this ad is awesome, would be great if Eddie could get the stores to be as good: Shop Like A Boss Commercial: http://t.co/ehG1X7qMwX $SHLD
D
29 Aug 14 08:11:24
Ugh. Finding myself really tempted to build up an $SHLD position again.
Market Headlines
29 Aug 14 07:46:45
$SHLD: 6 Really Bad and Sad Portfolio Types http://t.co/AfBQWw3Dlw http://t.co/FU1YFTbvDN
JaSchrein
29 Aug 14 07:38:28
RT @lachlan: Oh snap RT @MDuppler: Duh. $SHLD was profitable in 2012. RT @Esquiremag: You Are Not the President of Sears http://t.co/K2saok…
WeOweObamasTrillions
29 Aug 14 07:37:58
RT @lachlan: Oh snap RT @MDuppler: Duh. $SHLD was profitable in 2012. RT @Esquiremag: You Are Not the President of Sears http://t.co/K2saok…
Lachlan Markay
29 Aug 14 07:32:04
Oh snap RT @MDuppler: Duh. $SHLD was profitable in 2012. RT @Esquiremag: You Are Not the President of Sears http://t.co/K2saoktBGR
Mattie Duppler
29 Aug 14 07:31:08
Duh. $SHLD was profitable in 2012. RT @Esquiremag: You Are Not the President of Sears http://t.co/xfyk4asshQ http://t.co/99L14k4UZA
Daily Contracts
29 Aug 14 07:23:15
Real-Time feed of company contracts, original agreements and executive updates from Sears Holdings $SHLD http://t.co/KYcJDS9lUc
pdxoptions
29 Aug 14 07:21:34
$SHLD grrrr
				
				
By  +Follow December 9, 2013 3:32PM
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