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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. To read our full disclosure, please go to: http://www.equities.com/disclaimer


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Results for shld
Michael Cook
29 Jul 15 21:05:13
Our Stock Alerts Gained Over 550% This Month Already! See Our Huge New Pick Coming This Week: http://t.co/abs4Q0wdoH $XRAY $FOSL $SHLD
Paul Henry
29 Jul 15 21:02:48
Our Penny Stock Picks Have Gained 3,600% In 10 Months! Get Early Access To Our Next Pick: http://t.co/xXdYdpiHOc $XRAY $FOSL $SHLD
Michael James
29 Jul 15 21:01:24
After A MASSIVE 525% Gain On $GEQU, We Have A New Pick Ready! Special Update: http://t.co/wFGuoXnIev $XRAY $FOSL $SHLD
See the Light
29 Jul 15 20:25:55
RT @valuewalk: Fairholme Skewers Government On Fannie Mae $FNMA $FMCC $SHLD $JOE $BAC http://t.co/31CYdZOqkf $SHLD #FANNIEGATE $AIG http://…
WatchTheFunds
29 Jul 15 20:11:02
$SHLD Institutional ownership up 2.03% Q/Q, with 1,701,450 net purchase http://t.co/swNASF8kOJ http://t.co/MBUk2WcD3N
Louise Audley
29 Jul 15 18:52:55
RT @valuewalk: Fairholme Skewers Government On Fannie Mae $FNMA $FMCC $SHLD $JOE $BAC http://t.co/31CYdZOqkf $SHLD #FANNIEGATE $AIG http://…
Brian R. Werner
29 Jul 15 17:50:06
RT @valuewalk: Fairholme Skewers Government On Fannie Mae $FNMA $FMCC $SHLD $JOE $BAC http://t.co/31CYdZOqkf $SHLD #FANNIEGATE $AIG http://…
Tice Patrick Brown
29 Jul 15 17:46:07
RT @robertqking: It’s always a treat to read Fairholme’s letters. $FNMA $FNMAS $SHLD http://t.co/dY0GcUP1lb
Stock Market Picks
29 Jul 15 17:36:30
$ASML $SHLD $FNFG $PAYX $HOLX $JBHT Up to 900% #trading long positions from #NASDAQ, Ira account compatible http://t.co/1mj6DSmvnz $QQQ
Ethan2369
29 Jul 15 17:17:05
RT @valuewalk: Fairholme Skewers Government On Fannie Mae $FNMA $FMCC $SHLD $JOE $BAC http://t.co/31CYdZOqkf $SHLD #FANNIEGATE $AIG http://…
Walter Grady
29 Jul 15 16:20:52
RT @valuewalk: Fairholme Skewers Government On Fannie Mae $FNMA $FMCC $SHLD $JOE $BAC http://t.co/31CYdZOqkf $SHLD #FANNIEGATE $AIG http://…
enoch01
29 Jul 15 15:42:04
"our updated sum-of-the-parts valuation exceeds $125 per share fully diluted, net of debt." #whatever $shld
MacroStrategist
29 Jul 15 15:03:01
Top Stock Trade Ideas: $SHLD Forecast for August 05, 2015. Target: 20.74 [-5.12%] Current View: sell http://t.co/BHX4QKctkq
What?
29 Jul 15 14:40:06
RT @valuewalk: Fairholme Skewers Government On Fannie Mae $FNMA $FMCC $SHLD $JOE $BAC http://t.co/31CYdZOqkf $SHLD #FANNIEGATE $AIG http://…
#FannieGate
29 Jul 15 14:21:36
RT @valuewalk: Fairholme Skewers Government On Fannie Mae $FNMA $FMCC $SHLD $JOE $BAC http://t.co/31CYdZOqkf $SHLD #FANNIEGATE $AIG http://…
StockNewsWires
29 Jul 15 14:10:06
$SHLD: New Insider Transaction on SHLD by 10%+ Owner: http://t.co/Xz37sm8eGX
Pzaa...Guy
29 Jul 15 14:10:05
$SHLD - Statement of Changes in Beneficial Ownership (4) http://t.co/GBZBpwoN3p
Insider Alerts
29 Jul 15 14:09:04
NEW insider transaction on $SHLD reported a moment ago: http://t.co/AkPz9fQABs
Conf Call Tran
29 Jul 15 14:08:16
Major owner of Sears Holdings Corporation was just granted 1,202 ownership of the company. http://t.co/QcjbYcR0VZ $SHLD
FriendofFannie
29 Jul 15 14:07:51
RT @valuewalk: Fairholme Skewers Government On Fannie Mae $FNMA $FMCC $SHLD $JOE $BAC http://t.co/31CYdZOqkf $SHLD #FANNIEGATE $AIG http://…
Andrew Tomlinson
29 Jul 15 13:52:56
RT @valuewalk: Fairholme Skewers Government On Fannie Mae $FNMA $FMCC $SHLD $JOE $BAC http://t.co/31CYdZOqkf $SHLD #FANNIEGATE $AIG http://…
NOT2DAY
29 Jul 15 13:50:05
RT @valuewalk: Fairholme Skewers Government On Fannie Mae $FNMA $FMCC $SHLD $JOE $BAC http://t.co/31CYdZOqkf $SHLD #FANNIEGATE $AIG http://…
Fan O. Fred
29 Jul 15 13:46:16
RT @valuewalk: Fairholme Skewers Government On Fannie Mae $FNMA $FMCC $SHLD $JOE $BAC http://t.co/31CYdZOqkf $SHLD #FANNIEGATE $AIG http://…
Matt Hill
29 Jul 15 13:43:52
RT @valuewalk: Fairholme Skewers Government On Fannie Mae $FNMA $FMCC $SHLD $JOE $BAC http://t.co/31CYdZOqkf $SHLD #FANNIEGATE $AIG http://…
Eric
29 Jul 15 13:43:07
RT @valuewalk: Fairholme Skewers Government On Fannie Mae $FNMA $FMCC $SHLD $JOE $BAC http://t.co/31CYdZOqkf $SHLD #FANNIEGATE $AIG http://…
Dan McMurtrie
29 Jul 15 13:39:22
RT @valuewalk: Fairholme Skewers Government On Fannie Mae $FNMA $FMCC $SHLD $JOE $BAC http://t.co/31CYdZOqkf $SHLD #FANNIEGATE $AIG http://…
Wesley Traskiewicz
29 Jul 15 13:39:15
RT @valuewalk: Fairholme Skewers Government On Fannie Mae $FNMA $FMCC $SHLD $JOE $BAC http://t.co/31CYdZOqkf $SHLD #FANNIEGATE $AIG http://…
Doc Cartoon
29 Jul 15 13:38:22
RT @valuewalk: Fairholme Skewers Government On Fannie Mae $FNMA $FMCC $SHLD $JOE $BAC http://t.co/31CYdZOqkf $SHLD #FANNIEGATE $AIG http://…
ValueWalk
29 Jul 15 13:36:49
Fairholme Skewers Government On Fannie Mae $FNMA $FMCC $SHLD $JOE $BAC http://t.co/31CYdZOqkf $SHLD #FANNIEGATE $AIG http://t.co/E2he7MXkn3
George Maniere
29 Jul 15 13:18:14
@IncomeTrader @DividendMaster No one understood $SHLD. It was a reit posing as a retailer and the RE turned ugly. Lampert is not Vranos
InsiderTradingWire
29 Jul 15 13:18:03
$SHLD | Sears Holdings Corporation is down 50% since we reported $1,213,344 of insider selling on 06/03/2015. ... - http://t.co/3C8QtNEKK8
D Robertson
29 Jul 15 13:17:01
@GeorgeManiereg @DividendMaster Lampert had a great reputation when he took over $SHLD and then drove it into the ground
Irma Doucet
29 Jul 15 13:01:48
$SHLD Sears Holdings (SHLD) “Base Case” Is Liquidation: Evercore http://t.co/9PGHpCYbQU
alexheimann
29 Jul 15 12:48:51
@robertqking good read as always "our updated sum-of-the-parts valuation exceeds $125 per share fully diluted, net of debt" $shld
Robert King
29 Jul 15 12:43:26
It’s always a treat to read Fairholme’s letters. $FNMA $FNMAS $SHLD http://t.co/dY0GcUP1lb
Michael Cook
29 Jul 15 11:56:23
Our Stock Alerts Gained Over 550% This Month Already! See Our Huge New Pick Coming This Week: http://t.co/abs4Q0eCx9 $XRAY $FOSL $SHLD
Michael James
29 Jul 15 11:52:25
After A MASSIVE 525% Gain On $GEQU, We Have A New Pick Ready! Special Update: http://t.co/wFGuoX67mX $XRAY $FOSL $SHLD
Paul Henry
29 Jul 15 11:43:31
Our Penny Stock Picks Have Gained 3,600% In 10 Months! Get Early Access To Our Next Pick: http://t.co/xXdYdpAiFK $XRAY $FOSL $SHLD
WatchTheFunds
29 Jul 15 11:23:02
$SHLD Institutional ownership up 2.03% Q/Q, with 1,701,450 net purchase http://t.co/swNASF8kOJ http://t.co/opmGy3Pu1i
Tice Patrick Brown
29 Jul 15 10:29:48
@TheCreditBubble It's bound to enhance my skills at valuing $CHK and $SHLD, right?
MacroStrategist
29 Jul 15 08:27:25
Top Stock Trade Ideas: $SHLD Forecast for August 05, 2015. Target: 20.60 [-5.37%] Current View: sell http://t.co/BHX4QKctkq
mokrari by @edi_bice
29 Jul 15 08:04:12
Best outperformers ranked 25-30 $SHLD $CLUB $MNI $A $CTRN
Eric Chamberlain
29 Jul 15 07:59:00
RT @SearsHoldings: SHC Speaks: "Sears Heroes at Home Teams with Rebuild Together." http://t.co/aRSR5yk3SR $SHLD
Michael Cook
29 Jul 15 07:48:43
Our Stock Alerts Gained Over 550% This Month Already! See Our Huge New Pick Coming This Week: http://t.co/abs4Q0eCx9 $XRAY $FOSL $SHLD
Paul Henry
29 Jul 15 07:47:31
Our Penny Stock Picks Have Gained 3,600% In 10 Months! Get Early Access To Our Next Pick: http://t.co/xXdYdpiHOc $XRAY $FOSL $SHLD
Michael James
29 Jul 15 07:42:48
After A MASSIVE 525% Gain On $GEQU, We Have A New Pick Ready! Special Update: http://t.co/wFGuoX67mX $XRAY $FOSL $SHLD
Market Int Center
29 Jul 15 07:31:42
Sears $SHLD Showing Support Near $20.55 ( http://t.co/jwx3pYOqHn )
Jen Chamberlain
29 Jul 15 07:29:42
RT @SearsHoldings: SHC Speaks: "Sears Heroes at Home Teams with Rebuild Together." http://t.co/aRSR5yk3SR $SHLD
zooey m
29 Jul 15 06:20:45
StockWebTrading: $ASML $SHLD $FNFG $PAYX $HOLX $JBHT Up to 900% #trading long positions from #NASDAQ, Ira account … http://t.co/X3n8d6GPom
Stock Market Picks
29 Jul 15 06:20:00
$ASML $SHLD $FNFG $PAYX $HOLX $JBHT Up to 900% #trading long positions from #NASDAQ, Ira account compatible http://t.co/1mj6DSmvnz $QQQ
				
				
By  +Follow December 9, 2013 3:32PM
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