Sign in or Register

Already a member?

Sign in

Or sign in with your account on:

Not a member yet?


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.

Liked What You Read? Join Equities.com as a contributor and get eyeballs on your content FOR FREE!

Results for shld
22 Dec 14 02:30:02
22 Dec 14 00:25:05
$SHLD Insider Buying: Bruce R. Berkowitz Buys 5,000 Shares of Sears Holdings Corp Stock http://t.co/b1UQYzAZtd
21 Dec 14 18:31:17
RT @TALENTEDBLONDE: Srsly Eddie Lampert, quit wasting your ad budget on Sunday night football. $SHLD #NFL
21 Dec 14 18:30:03
Srsly Eddie Lampert, quit wasting your ad budget on Sunday night football. $SHLD #NFL
21 Dec 14 17:30:04
Sam Spice
21 Dec 14 14:56:56
Punching President Obama in the Face: A Good Gift Idea? http://t.co/ladz6lRZp0 via @daily_finance $AMZN $SHLD
21 Dec 14 14:30:04
21 Dec 14 12:27:19
Platinum Memberships Rose, After 528% Gains On Penny Stocks, In One Month! Big Update: http://t.co/2W3yKD2d5Q $XRAY $FOSL $SHLD
21 Dec 14 02:30:03
20 Dec 14 18:37:26
$SHLD exercised its option to extend the short-term loan from Chairman Lampert to February 28, 2015 http://t.co/FaGI5wzPDw
20 Dec 14 17:30:03
20 Dec 14 17:01:05
Appreciate how quiet Eddie has made Sears this holiday season. $SHLD #xmas14
20 Dec 14 14:30:03
20 Dec 14 13:03:04
Bullishness in $SHLD dropped 20.3% compared to past 48hr bullish average of 1.87 on a scale of 0-4
20 Dec 14 12:27:47
@SconnieTrader I merged $KSS, $JCP and $SHLD into #shitglomerate, converted whole thing to REIT & hired you to run it and I'm not clever, FU
20 Dec 14 10:43:04
$SHLD: Investor's Alert - Sears Holdings SHLD), FUJIFILM (FUJIY), Meredith ... http://t.co/Sw3S0jK9KU http://t.co/0ZYasMlCgi
Bidness Etc
20 Dec 14 06:37:21
Separation from Sears Holdings can turn out to be a benefit for Sears Canada - http://t.co/Ku3ZEIqrmT $SHLD http://t.co/srSTzHIVdO
20 Dec 14 05:30:03
20 Dec 14 04:53:03
Hottest Tweets for $SHLD (Sears Holdings Corp symbol SHLD) on 12/20/2014 http://t.co/z1I2GFHey4
20 Dec 14 02:30:03
20 Dec 14 01:53:36
Platinum Memberships Rose, After 528% Gains On Penny Stocks, In One Month! Big Update: http://t.co/2W3yKD2d5Q $XRAY $FOSL $SHLD
Win Whitman
20 Dec 14 00:58:50
Could be breaktout time on $EMC $LOW $SHLD $BWP Check out http://t.co/ymNl8WZ1VC
19 Dec 14 21:46:57
Platinum Memberships Rose, After 528% Gains On Penny Stocks, In One Month! Big Update: http://t.co/2W3yKD2d5Q $XRAY $FOSL $SHLD
Alesia Quick
19 Dec 14 20:50:30
Are you Bearish on these #stocks $SHLD $SPLK $ATO $FB #investing http://t.co/PA8w1NIr6L
19 Dec 14 20:03:24
$SHLD long term flirting w/ VAL but is it #DEEPVALUE? ST says value building on the lows so no. Sorry Eddie;) http://t.co/BurfsOQGxz
Mark Yusko
19 Dec 14 19:50:21
@nikkeix225 Can you get that precision on any stock? What does it say for $HGG $SHLD?
19 Dec 14 18:35:05
$SHLD Sears Holdings Corp major shareholder Bruce R. Berkowitz Buys 5,000 Shares http://t.co/TVGlpb5soh
Savanna Teel
19 Dec 14 17:39:38
Looking for the next $KRFT $SHLD $ILMN $FB #Stock http://t.co/Ha88UsTGdW
SBR China
19 Dec 14 16:46:16
RT @CarlynVilma: Great #Pennystock #research $WLK $SHLD $AJG $CBM #financialnews http://t.co/QCH87tQdmq
Carlyn Mccloskey
19 Dec 14 16:41:05
Great #Pennystock #research $WLK $SHLD $AJG $CBM #financialnews http://t.co/QCH87tQdmq
19 Dec 14 15:38:43
$SHLD:US Kmart, Sears apologize for canceled online layaway purchases #SEARS HOLDINGS CORP http://t.co/chO607Scsm #NASDAQ
Evnt Trader
19 Dec 14 14:30:23
$SHLD entered into a $400 million secured short-term loan with JPP II, LLC http://t.co/AXDymhkAng
19 Dec 14 14:30:04
Bidness Etc
19 Dec 14 14:19:42
Wal-Mart , Amazon And Sears In Trouble Over Illegal Toys Sold Online http://t.co/vcoIKmsjjy $WMT $SHLD $AMZN http://t.co/vT58d2pdNA
Bidness Etc
19 Dec 14 14:15:03
Sears Holdings mentions its focus on integrated retail to be a turnaround strategy http://t.co/mHJwo4468A $SHLD http://t.co/Tx5PQqgA3W
Raoul Chopra
19 Dec 14 14:10:07
Sears Canada speeding up investments in turnaround effort: CEO http://t.co/D4WxZX5zTJ $SCC.TO $SHLD
19 Dec 14 14:01:18
$SHLD - Current Report Filing (8-k) http://t.co/TahmB0mstY
Instrumental Data
19 Dec 14 14:00:48
2iQ Research
19 Dec 14 13:39:23
RT @DataLend: Sears Holdings $SHLD 83% utilized, fees to borrow still trending lower since October highs #securitieslending http://t.co/Fmo…
Tressie Clayworth
19 Dec 14 13:30:34
Should you buy, sell or hold $IDXX $MKC $SHLD $IBM #overvalued http://t.co/zXtoEOuhHL
Walton Dunham
19 Dec 14 13:18:32
Awesome #Stock #Research on $AMT $SHLD $MPC $FB Try this http://t.co/4B1xWmPan7
Daily Contracts
19 Dec 14 13:17:01
Real-Time feed of company contracts, original agreements and executive updates from Sears Holdings $SHLD http://t.co/QnH2ZEr07u
UnionSquare Research
19 Dec 14 13:12:46
RT @DataLend: Sears Holdings $SHLD 83% utilized, fees to borrow still trending lower since October highs #securitieslending http://t.co/Fmo…
Necole Harter
19 Dec 14 12:52:07
Find out the latest on $SHLD $CBT $PAY $YOD Worth a look http://t.co/wJXtcA4WCI
19 Dec 14 12:30:20
Sears Holdings $SHLD 83% utilized, fees to borrow still trending lower since October highs #securitieslending http://t.co/Fmou05QXdU
Darius Begay
19 Dec 14 12:00:47
Should you hold or add to $TPX $KRFT $SHLD $PCLN #singedinvestor http://t.co/CU5Bm80TyH
Michael Santoli
19 Dec 14 11:50:47
@JacobWolinsky $SHLD in much stronger hands. Patience and prayer...
Bidness Etc
19 Dec 14 11:27:17
Does #ShopSears Mark Another Failure Of #Sears ? http://t.co/bXxPBXudM8 $SHLD http://t.co/tipNaU3Kr1
Sol Tillery
19 Dec 14 10:52:42
Should you hold or add to $CMCSA $SHLD $CIE $AMZN Must see http://t.co/Oo1a6RVzh0
Leonie Machado
19 Dec 14 10:50:00
This weeks Stocks you should Watch $SHLD $UPL $AIZ $IBM #overvalued http://t.co/UTgcvxyhKV
By  +Follow December 9, 2013 3:32PM



blog comments powered by Disqus

About us

Equities.com is the most advanced interactive online social ecosystem for the financial industry, serving as a resource center and next-generation communication platform that connects self-directed investors with public issuers, market experts, and professional service providers and vendors. Registered members can leverage our exclusive proprietary research tools such as the Small-Cap Stars, which outperformed 90% of all small-cap mutual funds, and robust do-it-yourself E.V.A. research reports. The Equities.com Issuer Dashboard is the ideal tool to communicate and manage investor awareness campaigns to the investment community, as well as to access valuable resources to help your company grow.

Market Data powered by QuoteMedia.
Copyright © QuoteMedia. Data delayed 15 minutes unless otherwise indicated. Terms of Use.