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

By  +Follow December 9, 2013 3:32PM
Tickers Mentioned:

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
4 Mar 15 20:26:52
#Stocks to watch from The Value Line Investment Survey: $ELX $AVGO $UIL $CYBX $CRM $CHS $KSS $SHLD $CRI $SEAS $LB $TASR $PLKI $RIG...
Stock Rocket
4 Mar 15 19:06:52
Our Stock Picks Gained 400% In 5 Weeks & Our New Pick Is Coming Tomorrow! Get It Early: http://t.co/iCLDxkVSvn $XRAY $FOSL $SHLD
Penny Stock Secret
4 Mar 15 17:59:31
Yesterday We Made $89,000 In Just One Trade More Info Here http://t.co/NovWYe2RAx .. $BOSC $INCY $SHLD
Capital Market Labs
4 Mar 15 15:48:11
$SHLD Assets and Return on Assets Trends #CML http://t.co/sUKc8fnlRG
4 Mar 15 15:30:08
Insiders Selling: $WFT $TAP $DISCA $AXL $MWW $VRX $DGI $NUAN $AZO $SHLD $VEEV $RRD $MCO $DPS $SNX http://t.co/kl3VGOukhn #mkt #wallstreet
4 Mar 15 15:19:41
RT @ACInvestorBlog: Stocks to keep an eye on March 5, 2015 http://t.co/HB9mNZlaHs $BMRN $CLF $CYBR $HEB $JBLU $NFLX $SHLD
Maglan Capital
4 Mar 15 15:19:30
@GrimesHoldings Sure it does. $JCP and $RSH didn't do a REIT. $SHLD about to do one and raise $2bn. $FRP
4 Mar 15 15:19:14
Is a REIT Structure the Solution to Sears’ Woes? http://t.co/IvFcemxWGn via NREI $SHLD #retail #cre
Tom Grimes
4 Mar 15 15:17:35
@MaglanCapital @MC_Schwartz completing a REIT transformation does nothing, look at $JCP $SHLD $RSH, all preaching REIT Transfer
Antonio Costa
4 Mar 15 14:58:02
Stocks to keep an eye on March 5, 2015 http://t.co/HB9mNZlaHs $BMRN $CLF $CYBR $HEB $JBLU $NFLX $SHLD
Jack Trader
4 Mar 15 14:02:24
$SHLD Eddie Lampert's 2015 Letter to Sears Holdings Corp (SHLD) Investors http://t.co/QI3QYg4UW7
4 Mar 15 13:46:51
BRUCE BERKOWITZ R Sells $895,148 Worth of $SHLD Sears Holdings Co - #Form4 #InsiderTrading - http://t.co/pMfg5k66Sz
4 Mar 15 13:43:13
$SHLD - Statement of Changes in Beneficial Ownership (4) http://t.co/HhSO0WkVCz
Insider Filings
4 Mar 15 13:42:25
$SHLD: BERKOWITZ BRUCE R sold a net $895,148 in SEARS HOLDINGS CORP. http://t.co/dUyX09t0XT
4 Mar 15 13:28:20
#Stocks to watch from The Value Line Investment Survey: $ELX $AVGO $UIL $CYBX $CRM $CHS $KSS $SHLD $CRI $SEAS $LB $TASR $PLKI $RIG...
Capital Market Labs
4 Mar 15 12:16:41
$SHLD Revenue and Operating Margin Trends #CML http://t.co/KkonzFIuEb
Capital Market Labs
4 Mar 15 10:49:01
$SHLD Earnings and Valuation Trends #CML http://t.co/ndrkcUtLxC
Media Sentiment
4 Mar 15 09:24:01
$SHLD received a new alert. Find out why at http://t.co/nZwqReM0tj #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 264
Dan Mirkin
4 Mar 15 09:22:48
RT @thestockbandit: $SHLD nice relative strength today on resistance breakout
Jeff White
4 Mar 15 09:22:17
$SHLD nice relative strength today on resistance breakout
4 Mar 15 09:02:32
Lucky Jimmy: Momentum Players: SHLD Stock up +0.52% percent Today $SHLD High is http://t.co/Q4QesXolaA
4 Mar 15 09:02:11
Lucky Jimmy: $SHLD Sears Holdings Corp.: SHLD up +0.52% percent Today $SHLD Stock High is http://t.co/wTpb1i1FO4
Lucky Jimmy
4 Mar 15 09:00:22
SHLD Stock up +0.52% percent Today $SHLD High is at 38.82 and the Low 38.00 with current volume of 134,504. Se http://t.co/KTRiDDp5eW
Lucky Jimmy
4 Mar 15 09:00:00
$SHLD SHLD up +0.52% percent Today $SHLD Stock High is at 38.82 and the Low 38.00 with current volume of 134,504. Se http://t.co/azvw2BA6iS
4 Mar 15 08:47:43
Synthetic Long Discount Alert: SEARS HOLDINGS $SHLD trading at a 10.12% discount for the 20-Jan-2017 expiration http://t.co/GxTGryAU44
Dan Chapman
4 Mar 15 08:02:43
$SHLD (Sears Holding) stock edging higher, breakout watch above 39.65, http://t.co/EeNEzJJPZW http://t.co/LWQZLbO0Kf
4 Mar 15 07:51:52
$SHLD options are extremely expensive, anyone know why? ATM calls expiring this week are $1.20. Seems absurd....
Penny Stock Secret
4 Mar 15 07:45:25
Yesterday We Made $89,000 In Just One Trade More Info Here http://t.co/NovWYe2RAx .. $XRAY $FOSL $SHLD
Capital Market Labs
4 Mar 15 07:25:14
$SHLD Earnings Trend #CML http://t.co/3mOJhdRQCb
4 Mar 15 06:54:43
$SHLD (5 Stars), ABC Bullish Pattern, Targets http://t.co/Rx2wtGAxXq
4 Mar 15 06:24:16
Under CEO Eddie Lampert $SHLD posted 11 straight quarters of losses. Yet #JimCramer never went after him the way he did Don Thompson $MCD
4 Mar 15 05:27:02
$SHLD $WSH $UAL $MET: Chicago's 110-Story Willis Tower Said Put Up for Sale: http://t.co/CE1UNVIiMq
4 Mar 15 04:34:13
$SHLD: Revenue Update on Sears Holdings Corporation: http://t.co/oefac56yPF
4 Mar 15 04:34:09
$SHLD: Revenue Update on Sears Holdings Corporation: http://t.co/iuKwuyt3Lk
Breaking News
4 Mar 15 04:33:15
$SHLD: Revenue Update on Sears Holdings Corporation: http://t.co/tOlcgUWzIr
4 Mar 15 04:31:02
$SHLD: Revenue Update on Sears Holdings Corporation: http://t.co/waYTcHCYXP
Capital Market Labs
4 Mar 15 03:12:24
$SHLD Cash from Operations and Valuation Trends #CML http://t.co/ca1HFNYYRF
Capital Market Labs
4 Mar 15 00:07:37
$SHLD Return on Assets Trend #CML http://t.co/IGzyFl8fwj
Capital Market Labs
3 Mar 15 23:48:31
$SHLD Operating Margin Trend #CML http://t.co/89mwPzFzQS
Breaking News
3 Mar 15 23:01:03
$GM $IBM $SHLD $X: Berkshire Hathaway: Jain And Abel In Buffett's Succession Story: http://t.co/P1xrsC4GgW
Capital Market Labs
3 Mar 15 21:41:44
$SHLD Revenue Trend #CML http://t.co/uW9r6c850i
3 Mar 15 20:32:48
#Stocks to watch from The Value Line Investment Survey: $ELX $AVGO $UIL $CYBX $CRM $CHS $KSS $SHLD $CRI $SEAS $LB $TASR $PLKI $RIG...
Studioso Research
3 Mar 15 16:55:19
@Wexboy_Value @TheCreditBubble however one doubts $SHLD is worth this much once real estate is removed ... 3/3
Studioso Research
3 Mar 15 16:53:30
@Wexboy_Value @TheCreditBubble in all fairness, the $SHLD spinoffs from the last 14 months have done well ...1/
3 Mar 15 16:44:34
RT @Wexboy_Value: How many investors are still holding $SHLD today, based on what's now a decade-old investment thesis that never worked ou…
Becky Hiu
3 Mar 15 16:09:49
$SHLD flagging here? ᕙ(⇀‸↼‶)ᕗ http://t.co/l8euDOxkjs
3 Mar 15 15:03:26
$SHLD - Statement of Changes in Beneficial Ownership (4) http://t.co/wOf2JqmXCT
3 Mar 15 14:59:04
$SHLD: New Insider Transaction on SHLD by Chief Executive Officer: http://t.co/DT9PgWz3WY
Insider Alerts
3 Mar 15 14:58:19
NEW insider transaction on $SHLD reported a moment ago: http://t.co/XE7GduPN7U
Keebler Elf
3 Mar 15 14:42:11
$SHLD -38.50 break http://t.co/m6SHY6HMAV http://t.co/QUrjtAoQPb #stockcharts
By  +Follow December 9, 2013 3:32PM



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