The best way to improve your investing results is by learning as much as you can about finance and investing. As I try to soak up all of this knowledge, I’ve stored some top tips that I’d like to share with others that have the same passion as I have. To see my all of my favorite entertaining and informational podcasts and how I rank them, click here.
Value guys need to know when to sell and take profits when companies you own are overvalued.
14. From Invest Talk 1/23/13:
When interest rates go up, bond fund prices go down. Individual bonds do not go down if held to maturity. However, the drop in price isn’t even close to how much stocks lose during a crash.
Large cap companies with beta below 1 perform better than the market in the long term.
Listen to company’s conference calls, on investor relations website.
Don’t buy large caps right now because they are priced at 17+ times earnings. Not much growth potential.
12. From The Dave Ramsey Show Podcast 1/15/13: When wondering whether you should keep an item or investment use the following sunk cost analysis- would I spend money now to buy that item/ investment?
11. From Stansberry Radio 3/8/13: Pick a stock picking strategy AND stick with it.
10. From Invest Talk 1/25/13: Hedges against inflation: gold, silver
Lessons to invest by
1. Long term
2. Have a methodology
3. Be realistic with stops(for me, only if stock has soared up)
5. Manage the risk
9. From S&A Investor Radio 1/17/13: Look at how much private investors are buying companies for to get a feel of how much a company should be valued.
8. From Stansberry Radio 1/31/13: Guest recommends IAMGOLD $IAG, trading below book, Porter disagrees but sees it as good long term play, I like this recommendation.
7. From Stansberry Radio 1/21/13: Naked puts are a good stock strategy to get paid with stocks you want to buy for the long term.
6. From Invest Talk 2/19/13: When a stock is overpriced and you want to take some profits, put a stop in.
Baby steps to financial freedom and wealth
1. Save $1000
2. Be debt free
3. Save 3-6 months of expenses
4. 15% of income towards retirement
5. Child’s college
4. From Stansberry Radio 2/20/13: Invest in capital intensive companies like Hershey’s or coco cola, where cost to produce these products is the same every year. Companies whose products my grandchildren will use. Reinvest these dividends.
Capital efficient companies: A lot more of profits without having to spend a lot on itself year after year. Companies that make more and more on their asset base over time, those assets ought to be worth more: economic goodwill companies says Buffett. (Branded consumer products). Loyal customers make it an even better edge against inflation.
Buy companies with low price to cash flow, free cash flow considering 10 years of capital expenditures. P/C should be equal to 10 or less if it is considered cheap. Also be sure good ROA.
To get wealthy:
Have discipline and drive.
1. Save 50% of what you make
2. Have a small business or commission job where you can make more by being better
3. From The Dave Ramsey Show Podcast 2/2/13:
-Buy with cash
-Buy where you think it will appreciate
-Buy at 70% of market value
-Throughly screen tenants, get references from previous places of residence (not current)
-Don’t buy if it looks bad from the street
On buying a condo as an investment
-a condo loses value during a recession
-selling a property takes away about 10% in selling fees and costs
-in the first 5 years of paying your condo, you’re just paying interest on the mortgage anyways.
-condo association fees
-condo neighbors can be loud, not good for families
-condos harder to sell
On buying first home
-Won’t get approved for a mortgage if total debt is above 36% of gross monthly income (pay off student loans)
2. From Entreleadership 3/12/13: All successful people have one thing in common: self discipline. Success is rented, not bought, and the rent is due every day.
And the best tip I’ve heard from podcasts so far is…..
Best Tip from Financial Podcasts
1. From Stansberry Radio 1/14/13: In 2002 and 2003, Argentina’s currency crashed. The debts owed to the bank were based on the US dollar but liquid assets based on Argentina currency.
Probably less than 10% of Americans have positive net worth and $10,000 in savings
1. Save more than you spend
2. Grow your own income with a side business
3. Get some ok investments (8-12% a year)
4. BE DISCIPLINED.
5. Automatically reinvest your dividends
Podcasts Helped Formulate the Value Trap Indicator
The knowledge I’ve gleaned from these podcasts and various other investment sources such books and websites has helped me formulate an equation that uncovers companies that may look appealing at the surface but actually have financial weaknesses. This equation, which I called the Value Trap Indicator
, will tell you whether a company is currently undervalued, overvalued, or fairly valued based on 7 important categories.
**All Rights Reserved. Investing for Beginners 2013**
**Top 15 Tips from Financial Podcasts**
**Link for photo above: Photo Attribution**