Investing mistakes I have made packed into one video. I’ve went over some of these pitfalls and concepts before. Now, let me give some context about how these mistakes shapes the way I make videos going forward.
How’s it going everybody business beat the bush today i’m gonna talk about my investing failures now whenever i talk about an investing idea it’s always been something that have had success already in it however in the past like when i first started investing in high school and also in college i didn’t have such a good success i well barely made it out breaking even
So today i’m gonna talk about all those failures and what i learned from each one of them so today i’m gonna talk about three individual stocks that i invested in and why it was such a bad idea hopefully when you hear about all these stories you sort of gain experience for yourself one of the first things i bought in high school and yeah high school i somehow got
My hands on a brokerage account even in high school so i’m not gonna discuss how i was able to get this but i started buying into a penny stock even at the time i think i had about two three thousand dollars as a high school student i think i was in senior year so what happened after was me reading the news every single day on this particular penny stock somehow i
Led myself to believe that i was actually investing when in fact i was not what i was actually doing was reading the news and i was reacting to the news rather than doing long-term investing i was basically buying you know been selling maybe up to twice a day even and i would do this during school and somehow we have internet during class and i was like playing
And sewing right when class was happening so sometimes the stock would go like from 17 cents and it’ll bounce all the way up to 40 cents with no possibility of for me to predict that it actually would have happened it just it was just kind of like gambling i was like okay one day it goes up one day it goes down you know there’s no predictability and not any of
This so in the end what happened is you know i had to invest for a really long time and i still did not realize i was actually gambling because usually with any kind of penny stock it’s so opaque you do not have all the information that all the investors does you know there’s always gonna be a bunch of insiders that knows more information than you do of course
That’s insider trading but for small penny stock companies this is a lot harder meaning that it’s a lot easier for them to cheat a little bit and no one would actually ever notice so there’s my failure but the good redemption point of this was i started investing early although being in a bad way because i was buying into penny stocks the good redemption point
About this was that i did not have all that much money it was a lot to me at the time it was basically you know almost all my savings and i just put everything in there you know buy and sell and then i accumulate a lot of frictional costs in terms of trading fees back then there’s not as many free trading platforms as right now so the lesson here is yeah you can
Go off and you know start buying and selling and thinking that you’re investing when really you know now i know that i was and i was just gambling i’m like oh okay look there’s this talk i did not know too much about it but i thought i was learning more about it from reading all the news every single day reading all the news i know about it but you know it’s still
You know these days i wouldn’t even buy into a penny stock at all the second point where i fail miserably was when i started college i went to ucla at that time i went into a brand new bank i have never been to it’s a national chain bank really big and i walk in there and then as i’m getting my checking account you know doing some various things they have a flyer
Saying oh mutual funds look at the past year past second year perhaps three years we’ve been doing like 17 percent gains every single year so i’m like oh wow that looks pretty good i should invest i talked to one of the advisors over there and they’re like yeah i bye-bye and so i’m like okay you know i’m gonna put a portion of my savings in there and what ended
Up happening it always happens like this for some reason after i buy into it then it dropped a bit i forget how much it was i think i at that time i invested maybe $5,000 or something and then it dropped to i forget how much realistically but i remember the whole time i had it it wasn’t it was in the red that the whole time basically i waited probably five six
Years before i actually sold it that whole time it was creeping up a little bit at a time it was coming back to breaking even at some point and eventually when i sold it it almost broke even but you know even if you sell it at the same price that you bought it you actually lost time because you know all those years you could have been collecting you know your 8%
Annual return so the very very i wouldn’t say cheap lesson it was quite expensive a lesson because if you say five thousand dollars eight percent that’s four hundred dollars a year times let’s say six years that’s about two thousand four hundred dollars worth of lost revenue or lost profits i did not have because i made a wrong investment choice so what’s a $3,000
Lesson i’ve learned here is be super duper careful when someone is soliciting you on an investment choice when you walked in into a bank or something and someone asks you to buy something be very very suspicious they want a fee from you because when i bought that mutual fund from that bank someone made money and that’s how it is i was stupid at the time and did
Not know what i know today and i hope this helps you guys you know every single thing i’m talking about here it’s like one very expensive lesson for me the first one with a penny stock i don’t know cost of all like five hundred one thousand dollars in terms of cost of that lesson this is the cost of experience and you can see as i’m talking about the first one
Okay it cost me five hundred to one thousand dollars a second one cost me three thousand dollars buying sony stock was actually the third mistake i made there are various lessons here because sony has not actually traded on the new york stock exchange’s various currency risks here because the asset is actually in japanese yen now let me talk about what is wrong
With buying the sony stock you could buy it correctly if you analyzed it correctly because sony is a really big company may make a lot of different products my mistake at the time was that oh ah ps3 is really popular i have great belief that it’s gonna be very very popular therefore let me by sony stock which is the completely completely wrong reason to buy just
Because the company makes one single product and you like it does not mean you should buy that particular company unless and it’s a very very good product and most of the revenue comes from that particular product for sony they’re a huge company they make tvs they make like recorders or audio equipment you know it’s like this huge huge conglomerate they do not
Only make video games it’s like a very very tiny part of their whole profits so basically what i did was i bought a company based on one little sliver of profits that they’re making from you know one tiny little bit of their whole business and that is the completely wrong way to buy a stock if you analyze a whole company it might be profitable you might go okay
Yeah you know this business may be a hundred different businesses you put all together and you have to look at each one to see if you know in aggregate that they’re gonna be doing well over the next year over the next few years so that was a very very important lesson for me you have to analyze the whole company not a single product i know this is stupid you know
It’s a very very stupid mistake in retrospect i realize it’s a very stupid mistake now but i hope this lesson will you know teach you something because i did buy i forget how much i bought you know at least ten twenty thousand dollars worth of it and what happened was i think i did take a loss it dropped quite a bit at one point all the way down forty percent or
Something and i waited really really long i came back you know to only like minus ten fifteen percent and i’m like okay this is as high as it’ll ever go i’m gonna sell it take a loss and you know forget about it so that’s what i did it took a slight loss in terms of the original value but then there’s also the time loss must have been like four to six years of me
That was holding on to the stock and well that’s the third mistake so if you watch my previous investing videos i’ve added these tips i have talked about today in those videos before this includes be very very careful with buying penny stock i would even recommend to not buy them at all high cost mutual funds being more beneficial to the person that’s selling them
To you you really have to look at conflict of interest whenever someone sells you anything including investment advice the third one of course is to know every revenue stream that the company makes and just a little sliver of it i hope this video helps you learn so a lesson that i learned this is experience here which costs me a lot of money if you’re interested
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Transcribed from video
3 Costly Investment Mistakes I Made By BeatTheBush
