Thread: Investing 102
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Old 12-12-2011, 10:39 PM
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GregWeld GregWeld is offline
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Originally Posted by Sieg View Post
Thanks Greg.
Welcome!

People THINK investing is so "difficult" -- and it's really not.

I use the "Jeff Lynch" school of investing. His deal was -- buy stocks in things you understand - or in a store you shop at - etc. Because if you go to that store all the time - YOU can tell if things are going right with the company -- and you can also tell when it's NOT.

So lets just say you're a guy that's in Home Depot all the time - and Lowe's -- and you can never get what you want at Lowe's and every time you're in Home Depot - the place is crawling with customers and you LOVE the experience... then I'd buy Home Depot - IF it met my other criteria (chart looks good and it pays a dividend and or has growth and dividend).

It really isn't rocket science - but people use excuses NOT to invest. It's sad because it's really so damn easy. There's some RULES you need to learn along the way - basics - I don't GAMBLE - I'm not a "trader" - I'm an INVESTOR. I don't buy the latest high flyer everyone else is. And there's money left on the cutting room floor because I don't - but I sleep at night - and my money grows just fine.

Let's take a look at that..... Let's look at two stocks... NETFLIX and MCDONALDS.

I don't eat at McDonalds unless I'm trailer trucking by myself... but their chart is stellar - and the dividend is STEADY. I sleep well at night AND it's grown 125% (so more than a double) in 5 years. FANTASTIC.

I don't own Netflix - but it's been the darling high flyer... and it grew a bazillion percent in 3 or so years.... great! No dividend - no long term chart - but it's a flyer. So --- had I put in 100 grand - it might have gone up to 500 grand... but at what point would I have pulled the trigger and sold? When I doubled - or would I have gotten greedy with that kind of "quick money" and held for the next double? In the meantime - it crashed and burned.

So as an INVESTOR I'll take McDonalds over Netflix.... because it's harder to KEEP your money once you have some - than it is to make it. That won't make sense to most - but if you have some "real money" - then it makes a lot of sense. It's real easy to LOSE money. I hate losing money!
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