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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
Bluegrass Capital
24 Oct 14 20:28:56
RT @NeckarPlunger: @BrattleStCap $SHLD offers you a squeeze to ride 1-2 times a year. Take that &be grateful. But don't overstay your welco…
jason chan
24 Oct 14 20:15:28
$SHLD, $ABEV, $SODA for monday.
24 Oct 14 19:47:11
@BrattleStCap $SHLD offers you a squeeze to ride 1-2 times a year. Take that &be grateful. But don't overstay your welcome
Brattle St. Capital
24 Oct 14 19:34:02
@BrattleStCap when Business Insider tells you a stock is a short - you don't think. You lift every fucking offer in sight $SHLD
24 Oct 14 19:30:27
RT @USATODAYmoney: Sears disputes report of 116 store closures, nearly 6,100 layoffs. http://t.co/WyLX2YsVCI (Photo: Getty Images) $SHLD ht…
24 Oct 14 19:15:07
$SHLD | SEARS HOLDINGS CORP is up 37% since we reported a Form 13D filing on 10/17/2014. Did you make the ... - http://t.co/miXyR6UyYT
Teresa Dentino
24 Oct 14 16:58:00
Staples Latest Retailer Probing Possible Card Data Breach http://t.co/zGv0oWj8WR via @daily_finance $SPLS $SHLD $HD
Diane Amble
24 Oct 14 16:44:17
RT @rmack2x: Sears Layoffs Top 6,000, Closing Over 110 Outlets $SHLD http://t.co/kebQ2xSt5b
24 Oct 14 16:36:51
Observation: negative sentiment on Sears seems unchanged between recent lows & current squeeze. Hypothesis: $shld continues going higher.
Jen Chamberlain
24 Oct 14 16:35:35
RT @SearsHoldings: SHC Speaks: "Sears Holdings Receives Better Business Bureau Torch Award." http://t.co/CpDFe6buv9 $SHLD
24 Oct 14 16:31:11
RT @BrattleStCap: @jschembs @CloudChipotle @SconnieTrader LIFE IS A $SHLD SESSION (source: COBF page 750)
24 Oct 14 16:27:14
RT @rmack2x: Sears Layoffs Top 6,000, Closing Over 110 Outlets $SHLD http://t.co/kebQ2xSt5b
Irene V
24 Oct 14 16:21:48
RT @rmack2x: Sears Layoffs Top 6,000, Closing Over 110 Outlets $SHLD http://t.co/kebQ2xSt5b
Marlo Marshal
24 Oct 14 16:17:10
RT @rmack2x: Sears Layoffs Top 6,000, Closing Over 110 Outlets $SHLD http://t.co/kebQ2xSt5b
24 Oct 14 16:16:53
Sears Layoffs Top 6,000, Closing Over 110 Outlets $SHLD http://t.co/kebQ2xSt5b
24 Oct 14 16:14:39
Attn $SHLD investors: U.S. government grants five open #Ebola waste permits. $SMED may also procure a contract http://t.co/Qf6xGOhRfA
Trader Bob
24 Oct 14 16:11:05
Friday TODAY'S VIDEO POSTED HERE: http://t.co/nePOh28lcU $ISIS $SHLD http://t.co/SknCg44OOk
Trader Bob
24 Oct 14 16:09:48
Friday TODAY'S VIDEO POSTED HERE: http://t.co/GJH4k2vxRz $ISIS $SHLD http://t.co/VIIpuQg3U5
Trader Bob
24 Oct 14 16:09:28
Friday TODAY'S VIDEO POSTED HERE: http://t.co/Ui2hGyKkZn $SHLD http://t.co/YH3yiBDugw
24 Oct 14 16:03:27
MidCap #Stocks Trend $N $EW $CLF $RMD $WOOF $SHLD $BMRN $IDXX $IM $FLIR $SPLK $LGF $AVY $INFA $WDAY $FII $DAL @ http://t.co/tf79gD96D3
24 Oct 14 16:03:10
MidCap #Stocks Performance $N $EW $CLF $RMD $WOOF $SHLD $BMRN $IDXX $KLAC $IM $FLIR $SPLK $LEA $LGF $NCR more@ http://t.co/tf79gD96D3
Brian Sozzi
24 Oct 14 16:03:03
They are in everyone's 'hood... @kenclaflin $SHLD
24 Oct 14 15:16:36
Our Penny Stock Alerts Gained 371% In 2 weeks! Sign Up For Free Text Alerts For Our New Pick: http://t.co/Wsu24zYrur $XRAY $FOSL $SHLD
Brattle St. Capital
24 Oct 14 15:14:31
@jschembs @CloudChipotle @SconnieTrader LIFE IS A $SHLD SESSION (source: COBF page 750)
24 Oct 14 14:38:38
@BrattleStCap @jschembs any truth to the rumor blackberry is opening a store within a store at $SHLD? #ItFeelsRight CC @CloudChipotle
Rosa Barr
24 Oct 14 14:30:07
Sears Closing 100 Stores, Laying Off Over 5,000 Workers http://t.co/VdXbp61rzz via @daily_finance $SHLD
24 Oct 14 14:22:39
@jschembs @BrattleStCap wheeeeen will $SHLD make its triumphant return to the Dow??
24 Oct 14 14:15:41
$SHLD | SEARS HOLDINGS CORP is up 44% since we reported a Form 13D filing on 10/03/2014. Did you make the ... - http://t.co/bPPswxmjd1
24 Oct 14 13:56:08
learning experience #897 when the troll eddie thread went up on #cobf it was #thebottom long live $SHLD !
Chuck Faulkner
24 Oct 14 13:54:25
Loven SHLD (sears) After last nights post about JCP & SHLD I decided to take my first stock position in $JCP $SHLD http://t.co/jKbTnRMO5B
24 Oct 14 13:33:49
BUY $PFE 29.11, COVER $PG 85.16, SELL $PMCS 7.34, SELL $SHLD 38.97. More stock tips & details at: http://t.co/dbnFjvTVZP
Brian Sozzi
24 Oct 14 13:30:20
There iz a tiepo here @SearsHoldings $SHLD http://t.co/2RZ8J5ybyF
Jean Fonteneau
24 Oct 14 13:23:51
@BrattleStCap Must have been a good week for you too with the #bola crap stocks, $P and $SHLD hitting that $40 target, nice.
24 Oct 14 13:20:24
$SHLD up 3.02 after insider buying on open market: 132,700 shares on 2014-10-23 17:02:43. http://t.co/cgDRBexXdc
Shit Management Says
24 Oct 14 13:11:49
"We are not a store that anticipates." -- Sears $SHLD mgmt in 1978 http://t.co/xfDGNWpkWe via @CrainsChicago @ChicagoNewsHook
24 Oct 14 13:01:26
MidCap #Stocks Trend $N $SHLD $EW $RMD $WOOF $BMRN $IDXX $CLF $IM $FLIR $INFA $SPLK $AVY $DATA $WDAY $OCR @ http://t.co/tf79gD96D3
24 Oct 14 13:01:07
MidCap #Stocks Performance $N $SHLD $EW $RMD $WOOF $BMRN $IDXX $KLAC $CLF $LGF $IM $FLIR $INFA $LEA $SPLK more@ http://t.co/tf79gD96D3
24 Oct 14 12:53:17
$FB long 80.62 $CB long 96.33 $VRSN long 58.70 $SHLD long 39.01 #markets
UnionSquare Research
24 Oct 14 12:51:13
@The_Analyst You should take a look at the difference between SRAC and $SHLD bond yields to get an idea of how that would play out
Jordan S. Terry
24 Oct 14 12:49:54
I don't see any way $SHLD avoids restructuring through Chpt 11. Buyers of stores can largely wait & pay less, later...
Karen Edie
24 Oct 14 12:49:54
RT @chompie97: Sears Closing 100 Stores, LAYING OFF Over 5,000 Workers http://t.co/jrjXr0qMgJ via @daily_finance $SHLD
Patsy Cline
24 Oct 14 12:47:03
Sears Closing 100 Stores, LAYING OFF Over 5,000 Workers http://t.co/jrjXr0qMgJ via @daily_finance $SHLD
Paulo Santos
24 Oct 14 12:46:14
Btw, who really believes people will subscribe this $SHLD Canada stuff to begin with?
UnionSquare Research
24 Oct 14 12:43:57
RT @RetailPortal: Instead of which stores are closing $SHLD should just tell us which of its 1,750 or so Kmart/Sears stores are staying *op…
Becky Hiu
24 Oct 14 12:39:14
$SHOS might get a squeeze like $LE and $SHLD. That's my thinking.
Chris Brathwaite
24 Oct 14 12:31:05
RT @SearsHoldings: SHC Speaks: "Sears Holdings Receives Better Business Bureau Torch Award." http://t.co/CpDFe6buv9 $SHLD
24 Oct 14 12:26:52
Wathcing $SHLD pretty closely. Its up over 10% on news that the company is closing some of its dead weight stores... https://t.co/Ztz8phQBzm
gordon gekko is god
24 Oct 14 12:24:12
The Latest Sears Short Squeeze Flies In The Face Of Logic http://t.co/PtPlpAeH2O $SHLD
Paulo Santos
24 Oct 14 12:18:31
$SHLD Canada rights now down 20-45%
24 Oct 14 12:14:33
Top Gainers & Losers $RP 13.9% $N 11.59% $EW 11.13% $SPNC 11.09% $SHLD http://t.co/LBgOsjVKl7
By  +Follow December 9, 2013 3:32PM



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