Announcer: 00:00 You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern. To decode industry jargon, silence crippling confusion and help you overcome emotions by looking at the numbers, your path to financial freedom starts now.
Dave: 00:37 All right folks, we’ll welcome to Investing for Beginners, the podcast. This is episode 115 tonight we’re going to go ahead and take some more listener questions. We’ve got some fantastic questions that Andrew and I wanted to answer on the air. So we’re going to go ahead and talk about those. So without any further ado, I’m going to turn it over to my friend Andrew, and he’s going to go ahead and read the first question for us.
Andrew: 00:59 Perfect. So I have a question here from Camberley. She says I have some questions regarding IFB episode four the eight or the fine stock indicates a failing business. , I guess let’s go through these questions one by one. Number one. If you don’t know this, a falling stock until it’s too late, whether the options is the only option just to sell right then and accept your loss. So if you don’t mind, Dave, I’m going to take this one first. Absolutely. Go for it. So that’s, it’s tough, right? Because if we could figure out how to avoid falling stocks, we would do it. We would all do it, and we would all be very, very wealthy. The, so she did mention she listened to the episodes. So I did try to explain how you need to figure out the difference between a stock that is falling because the business is bad and a stock that is falling because of temporary sentiment that is negative in the stock market. I think a, and it goes really to what we try to teach.
Andrew: 02:08 To understand that very important difference, you have to understand the financials of a company. And so that’s why a tool like the value sharp indicators spreadsheet can be very useful in understanding the financials. So as an example, if you look at a stock and let’s say, the perfect example is like some of the recent developments we’ve seen, which I find this comical yesterday. Um, you know, we’re recording this podcast format, so people who might be listening monthly there. So it’s, it’s Kinda tough to do news on the podcast, but I’ll tell you we’re, we’re recording this at the very beginning of August 2019, and so there was like two, there’s like two or three big news themes. One of them is the Federal Reserve just in another rate cut, um, in a time where rates are arguably, really low already. Um, that’s a separate issue.[continue reading…]