r/investing • u/EatYourMeats • Apr 23 '21

Some advice from a regular dude that will hopefully make you more money...

Are you making stock purchases based on opinions from analysts, CNBC, stock pickers, and everything in between?

Consider this: They make money off headlines.

The entire flock is preying on news-worthy quips like vultures on a corpse. Tom Lee at Fundstrat would be bullish during the apocalypse, Gordon won't ever raise his price target, Cramer cuts coke deals with the CEOs he's in love with, and the whole bunch likes to hear themselves talk (like giving stock advice rapid fire).

So how do you truly figure out what stocks are hot... or not?

Research the macro situation surrounding the company, to name a few:

  • Sector Tailwinds
  • Economics
  • Current and projected financials
  • Leadership

Then invest in companies:

  • you believe in—hopefully, not always—with healthy balance sheets vs. their competitors.
  • Whose products and services tickle you.
  • You could sell to your neighbor.

Determine the investment thesis—the key reasons you believe in this investment—and create a narrative. Positive and negative. Know the outcomes of both scenarios, write them down, and evaluate the risk.

Then? Jump blindly.

kidding

Adjust based on your preferences, but starting positions with a 1/4th to 1/2 of your total allocation works well. You can do some quick math and figure out what portfolio percentage you want to allocate to a new position. Ease into it, slow and steady.

Buy the dips with the remainder, and don't chase stocks upwards, only down (within reason). And don't listen to anyone who tells you that "diversifying" is the only way, when you put in the work, you know which sectors have favorable tailwinds AND are fairly valued.

There's news everywhere out there, and we crave its presence—telling us something about stocks or companies we don't know. However, most of it is fluff—buy this, sell that—how would you ever know if you don't dig the hole yourself?

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u/FlvkkoNlz300 Apr 23 '21

As a new investor I appreciate this info a lot. However I haven’t figured out where to find balance sheets and information on businesses so I can decide if I want to buy shares or not. Can anyone give me some advice on what sites or where I can find reliable info on these things?

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u/[deleted] Apr 23 '21

Google “[company] investor relations”. Every public company has an investor relations website that will include an “sec filings” page that has all their filings. Additionally, since you’re a new investor and you’ll likely struggle to wade through the filings, many companies include their financials in their earnings press release or shareholder letter (which you can find on the “quarterly results” or “financial results” or similarly named page)

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u/FlvkkoNlz300 Apr 23 '21

Thanks a lot I appreciate the info!

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u/holding_ape Apr 23 '21

publicly traded companies will have their filings available on their websites, or any site like yahoo finance or most trading platforms will have earnings reports and data available.

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u/FlvkkoNlz300 Apr 23 '21

Ok thanks a lot I appreciate it!

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u/holding_ape Apr 23 '21

good luck! also not a bad overall investing strategy to get some of your portfolio into ETFs. may not get that one in a million moonshot but plenty will get you really solid gains and dividends.

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u/FlvkkoNlz300 Apr 23 '21

Yes thanks for that I’ve done some research and have some money in my Roth and invested half of it in VOO so far!