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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.

Results for shld
iHugo Albert
19 Apr 14 14:12:34
$SHLD GuruFocus Real Time Picks of the Week http://t.co/4KGnMf40mt
Nancy
19 Apr 14 12:51:16
RT @theflynews: $SHLD Sears director Thomas Tisch buys 475,000 shares: Full Story http://t.co/N9HaHTGPI2
Jama Dahl
19 Apr 14 12:41:58
$SHLD Todays movers to research $BPOP $AVB $SLV #equity http://t.co/2Y8WL2iAaU
ZOZO
19 Apr 14 12:23:48
Why Amazon Should Acquire Sears http://t.co/zfuObHApVg via @forbes $AMZN $SHLD
Brett Haynes, CCIM
19 Apr 14 12:15:21
RT @CNBC: Why Amazon should acquire Sears: http://t.co/bOB36wrtsk (via @KrystinaGustafs) $SHLD $AMZN
iHugo Albert
19 Apr 14 11:44:04
$SHLD US close: Stocks end mixed despite positive developments in Ukraine http://t.co/UZp4V9MJ5X
Cecily Humphrey
19 Apr 14 11:17:26
$SHLD Is it breakout time on $WYN $LUV $GAIN #NASDAQ http://t.co/4Ki5uCBCoz
johnette napolitano
19 Apr 14 10:40:38
Macy's, Amazon and Sears Busted for Pushing Phony Bamboo Fabrics http://t.co/7XlUrekarL via @daily_finance $AMZN $M $SHLD
Chad Henage
19 Apr 14 10:01:05
Seriously? How bout NO RT “@CNBC: Why Amazon should acquire Sears: http://t.co/Jz12wtvM9M (via @KrystinaGustafs) $SHLD $AMZN”
gordon gekko is god
19 Apr 14 07:32:39
Analysis: Eddie Lampert should take Jeff Bezos' call http://t.co/Yt8FDITrmG $AMZN, $SHLD
Davis Fin Strategies
19 Apr 14 07:28:55
"@CNBC: Why Amazon should acquire Sears: http://t.co/iz4VtvguLr (via @KrystinaGustafs) $SHLD $AMZN" Nice idea.
Yusuf Yesil
19 Apr 14 07:21:04
RT @CNBC: Why Amazon should acquire Sears: http://t.co/GILU5tIEUA (via @KrystinaGustafs) $SHLD $AMZN
Plan Maestro
19 Apr 14 06:50:40
@ejburnside @Magyer wow, a few stores maybe but the whole chain? $SHLD $AMZN
Elias Samir Farraj
19 Apr 14 06:47:38
RT @CNBC: Why Amazon should acquire Sears: http://t.co/GILU5tIEUA (via @KrystinaGustafs) $SHLD $AMZN
Amin Shahidi
19 Apr 14 06:39:16
RT @CNBC: Why Amazon should acquire Sears: http://t.co/GILU5tIEUA (via @KrystinaGustafs) $SHLD $AMZN
Tyler Smith
19 Apr 14 06:25:06
RT @CNBC: Why Amazon should acquire Sears: http://t.co/GILU5tIEUA (via @KrystinaGustafs) $SHLD $AMZN
superk
19 Apr 14 05:44:11
RT @CNBC: Why Amazon should acquire Sears: http://t.co/GILU5tIEUA (via @KrystinaGustafs) $SHLD $AMZN
Joel Whitworth
19 Apr 14 05:40:20
Hmmm..RT @CNBC: Why Amazon should acquire Sears: http://t.co/eruEwGZGzI (via @KrystinaGustafs) $SHLD $AMZN
Salvador Guerrero
19 Apr 14 05:35:24
RT @CNBC: Why Amazon should acquire Sears: http://t.co/GILU5tIEUA (via @KrystinaGustafs) $SHLD $AMZN
Keith Crawford, MBA
19 Apr 14 05:32:10
RT @CNBC: Why Amazon should acquire Sears: http://t.co/GILU5tIEUA (via @KrystinaGustafs) $SHLD $AMZN
Zachary
19 Apr 14 04:46:24
RT @CNBC: Why Amazon should acquire Sears: http://t.co/GILU5tIEUA (via @KrystinaGustafs) $SHLD $AMZN
Susan Schulte
19 Apr 14 04:36:05
RT @CNBC: Why Amazon should acquire Sears: http://t.co/GILU5tIEUA (via @KrystinaGustafs) $SHLD $AMZN
Zeeshan Shah
19 Apr 14 04:27:50
RT @CNBC: Why Amazon should acquire Sears: http://t.co/GILU5tIEUA (via @KrystinaGustafs) $SHLD $AMZN
Henri M. ★彡
19 Apr 14 04:20:05
RT @CNBC: Why Amazon should acquire Sears: http://t.co/GILU5tIEUA (via @KrystinaGustafs) $SHLD $AMZN
nosGOZZ
19 Apr 14 04:12:43
RT @CNBC: Why Amazon should acquire Sears: http://t.co/GILU5tIEUA (via @KrystinaGustafs) $SHLD $AMZN
村田雅志(むらた・まさし)
19 Apr 14 04:11:43
RT @CNBC: Why Amazon should acquire Sears: http://t.co/GILU5tIEUA (via @KrystinaGustafs) $SHLD $AMZN
Quincy C. Knapp
19 Apr 14 04:06:21
RT @CNBC: Why Amazon should acquire Sears: http://t.co/GILU5tIEUA (via @KrystinaGustafs) $SHLD $AMZN
Sithi
19 Apr 14 04:00:25
RT @CNBC: Why Amazon should acquire Sears: http://t.co/GILU5tIEUA (via @KrystinaGustafs) $SHLD $AMZN
DM
19 Apr 14 03:38:19
RT @CNBC: Why Amazon should acquire Sears: http://t.co/GILU5tIEUA (via @KrystinaGustafs) $SHLD $AMZN
Ruth Adkins
19 Apr 14 03:33:57
RT @CNBC: Why Amazon should acquire Sears: http://t.co/GILU5tIEUA (via @KrystinaGustafs) $SHLD $AMZN
Allen Davidov
19 Apr 14 03:25:18
RT @CNBC: Why Amazon should acquire Sears: http://t.co/GILU5tIEUA (via @KrystinaGustafs) $SHLD $AMZN
Lee Durocher
19 Apr 14 03:23:16
“@CNBC: Why Amazon should acquire Sears: http://t.co/CdoBARIQ3Z (via @KrystinaGustafs) $SHLD $AMZN” So would stores be renamed "Amazons"?
iBizNews21
19 Apr 14 03:21:11
RT @CNBC: Why Amazon should acquire Sears: http://t.co/GILU5tIEUA (via @KrystinaGustafs) $SHLD $AMZN
Joe Magyer
19 Apr 14 03:16:27
Amazon needs a bunch of rotting, zombie mall real estate like I need a walker gnawing on my leg. $SHLD #WalkingDead
Business News
19 Apr 14 03:15:03
RT @CNBC: Why Amazon should acquire Sears: http://t.co/GILU5tIEUA (via @KrystinaGustafs) $SHLD $AMZN
Legend Boulstridge
19 Apr 14 03:13:24
$SHLD Keeping my Eye on $CIE $BDX $GRPN #economy http://t.co/tsxEPVW8Pb
Road Rider
19 Apr 14 03:03:42
"@CNBC: Why Amazon should acquire Sears: http://t.co/Wif0aKHJuj (via @KrystinaGustafs) $SHLD $AMZN" @teenajeen
Angela Amos
19 Apr 14 03:03:25
RT @CNBC: Why Amazon should acquire Sears: http://t.co/GILU5tIEUA (via @KrystinaGustafs) $SHLD $AMZN
World Business News
19 Apr 14 03:01:12
RT @CNBC: Why Amazon should acquire Sears: http://t.co/GILU5tIEUA (via @KrystinaGustafs) $SHLD $AMZN
Biashara News
19 Apr 14 03:01:12
RT @CNBC: Why Amazon should acquire Sears: http://t.co/GILU5tIEUA (via @KrystinaGustafs) $SHLD $AMZN
CNBC
19 Apr 14 03:00:44
Why Amazon should acquire Sears: http://t.co/GILU5tIEUA (via @KrystinaGustafs) $SHLD $AMZN
iHugo Albert
19 Apr 14 02:33:33
$SHLD Mid Cap Volatile Stocks: Criteo (CRTO), Nimble Storage (NMBL),Nelnet (NNI ... http://t.co/aTQjuFieZQ
Thor Edeson
19 Apr 14 02:12:08
Should you buy $CPT $SHLD $EQIX $TSLA #economy http://t.co/3EnFqks9iC
iHugo Albert
19 Apr 14 02:06:04
$SHLD Services Sector gainers: Sears Holdings Corp (NASDAQ:SHLD), Acacia ... http://t.co/6SSCAvrva0
iHugo Albert
19 Apr 14 01:43:04
$SHLD The Retail Collapse Grows [Family Dollar Stores, Inc., Coldwater Creek Inc., J ... http://t.co/YW56fMHX11
Stock Signaling
19 Apr 14 01:01:14
Insider Buys: $MILL $MRNA $NPBC $CPRX $UEC $C $ESL $SHLD $APPY $EQIX $NMFC $RT $NEON $WEN $LLY http://t.co/3gvJLENZtD #nasdaq #stock #stocks
iHugo Albert
19 Apr 14 00:53:33
$SHLD Sunny Skies Over Home Depot http://t.co/quUfj3Lqnr
iHugo Albert
19 Apr 14 00:48:04
$SHLD Lands' End: Spin-Off Situation With 60%-90% Upside http://t.co/AmBW4Mhnak
iHugo Albert
19 Apr 14 00:26:33
$SHLD Michaels says security breach may impact 2.6 million http://t.co/pzaNJn1Vvc
Brenden Black
19 Apr 14 00:25:14
$SHLD #Stocks you might want to sell $NBR $COF $CHTP View now http://t.co/Jj8bXDBd91
				
				
By  +Follow December 9, 2013 3:32PM
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