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Good day subscribers thank you so much for joining me today i am jeremy this is the financial education channel in today we’re talking about the seven deadly sins of stock market investing i think this video is very important to do we’re talking about the worst things you can possibly do when your stock market investing i have been part of some of these sins of stock
Market investing and lost great sums of money unfortunately i’ve done some of the things we’re gonna talk about here today i’ve seen others do some of these things in a lot of these sins or some of the ways that people lose the most amount of money in the stock market some of these sins are the ways that people never end up making money in the stock market because
They’re committing some of these and some of you guys out there you might be committing some of these right now so i think it’s very important to talk about we’re gonna talk about this and and hopefully this will enlighten you guys on some of the things you definitely want to avoid out there in stock market investing so let’s just go ahead and get right into this
Guys and leave a thumbs up if you enjoyed it and let’s talk so number one number one deadly sin of them all in my opinion is investing in a stock or investing in a sector that you do not fully understand you do not fully comprehend it so many times i’ll see people investing in a stock or a company that they didn’t even fully really understand they might understand
A little bit about it they might know a little bit about that company or the sectors and but they didn’t really fully understand it when you invest in something when you give your money to invest in something that you don’t fully understand it’s gonna be very hard for you to succeed in that investment because what happens if a hard time comes on that company what
Happens if the sector struggles that that company’s in you don’t even really understand it fully to the first place so when you’re sticking money towards something that you don’t fully understand that can be very very harmful in and what could end up happening is that sector or that company might struggle stock might go down you might panic in sell because you
Never even really fully understood from the get-go so if in my case is when i invest in a company i fully understand this is definitely a sin i never i fully understand every single investment i ever invest in so then if that investment does go down which remember when i first invest in something don’t matter who you are when you first invest in something there’s
A 50/50 chance that that stocks actually going to go down after you invest in there’s a 50/50 chance so the 50% of time that stocks gonna go down after i invested it might go down 2% 5% 10% 20% we don’t know so if i was never comfortable investing that in the first place if i didn’t know that stock really freeking well then the chances are i would probably just
Have sold it right so that’s the number one sin i see people committing investing on a stock investing in a sector of stocks that they do not fully understand make sure you fully understand that stock make sure you fully understand the industry it’s in the sector it’s in and then you can go on to invest in it at that point the number two deadly sin of stock market
Investing is investing based upon what other stocks opinions are so based upon warren buffett’s opinion based upon my investing just because i’m investing a stock doesn’t mean someone else should go invest in that stock just because i see warren buffett he says by abc stock doesn’t mean i should go buy abc stock that might be a bad stock so regardless of who it is
You should not just invest based upon what somebody else thinks you should based upon invest based upon what you feel what your opinion is you don’t want to stick the blame on somebody else you want to stick the blame on yourself if you make a bad investment decision you should i see a lot of people they see somebody on tv they see somebody here there say oh they’re
Buying that stock so therefore i should buy that stock no absolutely not you should buy a stock because you believe in that stock because you’ve gone through the fundamentals because you’ve looked at that business inside now and you feel like you know what this is where i want to stick my money i’m gonna make a lot of money over the next couple years or whatever
Your time frame is if i invest in the stock guys i see it so often i mean think about for instance on this channel where the two stocks i’ve been preaching that i’m buying since literally i started the three stocks on buying series were the two stocks i’ve talked about gopro and wynn resorts if people would have listened to me as far as you know oh jeremy’s buying
Gopro that should be a good one for me guess what they would have lost a lot of money now on the other hand of course wynn resorts is a completely opposite story that stocks up massively so regardless and the same thing i could look at a word buffett i could say wow that stock he’s gotten is really up huge that stocks up through the huge so this next one that’s
Gonna be up huge and he’s had a lot of investment failures over the last few years you know you look at the the one that comes to mind the most of all him is tesco which is a european retailer he lost literally billions of dollars on that investment so don’t matter who it is you should never just invest your make your investments just based upon because they’re
Buying a stock and same thing if they’re selling a stock doesn’t mean you should sell a stock make your own investment decisions don’t don’t just do it because somebody else did it so that’s really bad there’s a really pat sending guys number three this is by far my biggest sin i commit and i commit this sin so often and i’m ashamed of it i really am and this
Deadly sin is going too heavy into a stock going too heavy into one stock i i commit this sin so often guys and it’s a one that i need to really get rid of in quit doing because i do it so often it bugs me and it’s just going too heavy into one stock i’ve done it so many times i’ve been a hundred percent in positions before where i literally every dollar in my
Account is in one stock and it’s a really bad if they’re a really bad decision and it’s one of the worst decisions you can make because if that company struggles then your entire portfolio literally goes down well however much that stock goes down so i have a i have a lot of trouble with this and it’s a sin that i’m trying to commit less and less and hopefully not
At all in the future but i’ve committed so many times where i’ve been 80% of my portfolio in a position ninety percent a hundred percent it’s a really bad move even if you’re so confident on that company’s gonna succeed even if you believe so much in that company just because you believe in that company just because maybe they report to numbers does it mean that
Stock is gonna go up a lot of it’s going to depend on what the analysts think and do they think that stocks should go up a lot of it’s gonna depend on you know the big fund managers do the big fund managers believe in that stock so just because i invest in a stock i believe in our lot it’s just because i stock maybe does good financially does not mean that stocks
Gonna go up it could actually go down based upon someone else’s opinion that has a lot more weight than mine my opinion has no weight i can’t move a stock up and down even regardless of how many subscribers i have on this channel and analysts though they can move that stock up five ten percent in a day or down so i’ve gone too heavy and so many stocks over time
As so many countless ones i can tell you guys and it’s definitely saying you do not want to commit you know you want to be done you want to be diversified a bit and you don’t ever want to go too heavy into just one stock regardless on how much you believe in that stock number four deadly sin is stock market investing is investing on margin this is one i got caught
Up into late 2014 into 2015 investing on margin meaning basically you’re taking out loans to invest more money in stocks hoping that you’re gonna get the gains you need to get you also have to pay interest on that margin loans which i was paying six seven percent on those margin loans so say i’m took on a margin loan for a hundred thousand dollars over the course
Of a year i have to pay six to seven thousand dollars in margin interest on that it’s a really bad move i mean i love warren buffett saying as far as investing on margin he says if you’re dumb you have no reason to use it and if you’re smart you don’t need it if you’re smart you don’t need to be investing on margin and if you’re dumb you have no place in using
Margin to invest and i knew that saying forever and i wish i would have just kept with that saying because i ended up starting to use it and it was a really bad move because then i begin to get short-sighted some of those kinds of things i began trying to make fast money which is something we’ll get into in a minute and and just really screwed me up and i had to
Pay thousands upon thousands of dollars in interest it lost me money in the end because i was investing into short-term don’t mess around with margin no reason to do it guys no reason number five investing in the company with a poor balance sheet this is one thank goodness i never commit ever i always invest in companies that have very strong balance sheets the
Companies that are loaded up on cash have very little or no debt so often i see people invest in company with a balance sheet that is loaded up with debt has hardly any cash on it and things like that and then they the the company falls on hard times right then what ends up happening to that person’s investment it’s gonna go down massively because then also in the
Worry becomes could this company face a bankruptcy do they need to take out massive amount of loans to cover the the business operations right now you never know when you can invest in a company and it can fall on hard times i mean think about you think about you could own the best restaurant stock right you don’t the best restaurant stock in the world such a well-run
Company if owes and they have an e coli situation a big e.coli situation something like that it’s gonna damage the brand massively for multiple years it’s gonna take him a long time to get back from that it could they could end up going from a very profitable business to actually unprofitable overnight we saw that happen with chipotle right chipotle’s such a well-run
Company such an amazing company profitable all these things chipotle investors overnight they’ve got killed you know but lucky enough chipotle had a great balance sheet say chipotle did not have a great balance sheet and they could not have gotten through those hard times it would have been bankruptcy fears there would have been all these different fears out there
Chipotle stock instead of dropping from 700 to 400 probably would drop from 700 to $100 700 250 dollars something like that so always make sure you’re investing in companies with strong balance sheets because a recession can come out of nowhere a company falling on hard times a fill product a failed service can come out of nowhere sometimes it’s just bad luck that
Happens with that but guess what if you ever if you invest in a company that has a strong balance sheet you don’t have to stay awake every night and think oh my gosh i’m is my company gonna go bankrupt you don’t have to do that guys number six the six deadly sin of stock market investing investing in a company that is scared to put itself out of business what does
That mean there are certain companies out there who are strictly focused on just trying to keep market share trying to just not expand business just trying to focus on their one business and they’re not they’re not scared to put themselves out of business they’re not scared there should say they are scared to try to create new products and services because they just
Want to hold up that what they have right now this is actually a great analogy i learned that she from steve jobs you know he pointed this out with a lot of companies steve jobs i remember back in the 90s he did a great interview and he pointed out on how a lot of companies is silicon valley a lot of tech companies what will happen is they get a certain amount
Of market share right they get a certain amount of market share in their business and that’s where all the profits come from and that’s the where they’re a beast and then they don’t really care to start anything new because they just want to keep that market share so they don’t scare to start a new product that might eliminate their old product right because they
Just want to keep their old product and what ends up happening is those companies begin to get run by a lot of marketing people right and the innovators the innovators of that company and kind of slowly die off because they’re not important it’s just about keeping this market share at this point so if you’re ever in a company investing in a company that’s afraid
To put itself out of business then that’s a bad move you want to be in companies that are skating to where the puck is regardless if that’s gonna take market share from them i mean i all the time in my business is i’m trying to do something that might eliminate my business right i’m trying to come up with new products and services that might actually eliminate
Old products and services i’ll give you an example for my current business i just came out with the new product which is basically i have a like one of those segways i don’t know what you call i think you call it a segway i bought one of those from best buy i was like 400 bucks and basically what i can do now you know i’m in real estate marketing i do photos and
Videos for homes and whatnot so what i can do now is i can roll around a house get all smooth shots with my dslr which is on like a tripod not really a tripod like a basically like a you stick type deal hold that go all around the house and it’s like a video virtual tour right well that kind of eliminates one of my old products or potentially eliminates which was
A much more intricate process where i’d use sliders all these different things all these different fancy tools so in this new products actually cheaper than an old product but it’s important that i do that because if i’m not willing to try to put myself out of business and try to do something that will create and maybe eliminate an old product or service somebody
Else is gonna do it somebody else is gonna think of that idea and say okay and then my customers will go with them rather than me because that’s a cheaper alternative that maybe maybe a better idea a lot of companies are scared to do that to themselves guys the the you know and they end up getting put out of business end up losing market share because somebody
Else thought of that idea somebody else wasn’t scared to go out there and execute they were scared to go out and execute i see this a lot with blue chip stocks guys so watch out for that if you’ve got a company that’s not really thinking outside the box and trying to expand then those kinds of things just trying to hold market share they’re gonna end up losing
Market share and i can guarantee you that somebody else is gonna take that business from them so i mean imagine looks like an apple for instance imagine if apple said you know what we’re not gonna create the ipad you know why we’re not going to create the ipad because guess what some people are gonna end up buying this ipad instead of buying a mac that’s how
Apple could have thought right that’s how apple could have thought that’s how steve jobs could have thought about things i don’t want to create an eye peg because guess what that’s just gonna take market share from the mac because some people like myself until you know i started my new businesses and whatnot i didn’t have no need for a mac i could just have an
Ipad everything i could pretty much do on a mac other than you know some of the heavy photo stuff and video stuff it’s first surfing the web and a lot of different tools i can do right on this ipad imagine if apple thought about that guess what would have happened somebody else would have created this tablet somebody else would be selling tens of millions of one
Of the ipads per year rather than apple doing it apple would have lost share in the ipad space and wash era in the mac space imagine if apple thought hmm let’s not create a 5.5 inch phone because that might take market share from ipad sure enough it has because some people will have a 5.5 inch iphone now and they’re like i don’t really need an ipad that’s big but
Guess what that was a really good move from apple because they weren’t scared to eliminate another product by a new product so that’s a big thing guys i think that’s a big thing and i hope i explained that really well because i don’t want that to go over people’s head i really don’t i hope i explained that to you guys very well number 7 the last deadly cent of
Stock market investing it’s getting cocky and basically getting addicted to quick money getting addicted to quick money it can happen it’s happened to me in the past where you invest in a stock and maybe you say you invest 50 thousand dollars in a stock olson and then olson for whatever reason the next day and analyst says something good about or something jumps
Up ten percent you make five thousand dollars in a day right that’s addictive it can be very addictive to also make quick money and also if you make five hundred dollars the next day the next day actually seems kind of lame it’s like only made 500 dollars say that’s kind of lame how can i how can i make some quick money how would i get going with some other things
And this was how i got caught up in the things because i was making a lot of money really fast in almost and i was just not addicted to the quick money and i was so i started playing earnings i started trying it okay i made ten thousand dollars yesterday let me try to make twenty thousand dollars tomorrow then i end up losing money then i try to chase my bets and
Things like that oh my gosh guys so be aware that when you have success investing there’s definitely the possibility that you might get cocky you might get addicted to that quick money and just say this sin is staying away from me i’m not gonna freaking i’m not gonna get addicted to this i’m not gonna get addicted to this quick money and get them focus on some of
Those kinds of things guys so i hope you enjoyed this today the seven deadly sins that i call them in stock market investing are you guys committing any of these let me know in that comment section if you’re committing any of these right now i would love to hear from you guys like i said the one i have the biggest struggle with was that number three going heavy
Into one stock and it’s it’s such a bad move and i get caught in that so so much so often i’m trying to get rid of that i’m trying to get rid of that that’s the one i’m fighting personally in the most let me know which one you guys are fighting the most i would love to hear from that if you just came across this channel you may want to subscribe we talk personal
Finance and channel i’m an actual business owner i give away so many business tips including that one that was actually number six where we talked about that’s actually a big business tip and then number three we talked about the stock market the most of anything thank you for watching guys and have a great day
Transcribed from video
The 7 DEADLY SINS of STOCK MARKET INVESTING! By Financial Education
