Kindle Notes & Highlights
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July 23 - December 8, 2020
No matter how great your problems may be, or how bleak your life may feel, it is truly amazing how well things can eventually work out. I never thought it possible that I could be so successful, but it happened—and it can happen to you too, if you stay positive and don't give up.
"When in doubt, get out." The reason that aggressive selling is so important is that if you are willing to be aggressive when it comes to selling, it is much easier to be aggressive when it comes to buying.
In the stock market, it pays to constantly test the waters. If you take enough small probing bites, you will eventually find a tasty meal.
The Investing Shark knows that calling a market turn once in a while may make you a media hero, but reacting quickly to changing circumstances will make you rich.
Many investors fail to produce good results simply because they have a hard time dropping stocks that have rewarded them well in the past and embracing new and better ideas.
Successful Investing Sharks don't just buy and sell stocks randomly. They formulate specific strategies for each of their investments. They know when they want to buy, and they have a plan for when they will exit.
Sharks always have a plan and know what they are going to do, so that losses by inertia don't pile up.
The essence of patience is waiting until the time is right and not letting anxiety drive you to act prematurely. The essence of aggressiveness is bold and forceful action when the time is right. The combination of the two traits is extremely powerful. Patience is important not only in waiting for the right opportunities to buy, but in waiting for the positions you have to eventually work.
Shark Investors have to constantly remind themselves to stay objective when evaluating the justifications for holding this stock. They want to make sure they are not letting emotional factors influence their thinking.
If you didn't already own this stock, would you be inclined to be as heavily invested in it as you are now?
The ability to make a clear decision, act on it boldly, and then change your mind seems almost schizophrenic at times, but it is a key element of how Sharks survive and proper.
One of the big benefits of selling a stock in which you have a large loss is that it often frees you up mentally and allows you to gain a fresh perspective.
The key to stock market success is properly managing your investments after you buy them. The way to do that is fairly simple: Don't be afraid to sell. Think of selling as a form of insurance. Have a methodology that clearly establishes exit points. Diversify by stock as well as time frame. Use a partial-buy and partial-sell approach.
The most important component of any stock-hunting methodology is to do a lot of reading.
Keep in mind that chart reading is much more an art than a science and is an imperfect art at best.
Now that you have culled your list and are focusing on stocks with favorable charts, you need to look at fundamentals.
Quite often I take a small initial position in a stock that looks interesting to focus on it and to make sure that I don't lose track of it.
If the starting position doesn't work the way you hoped, dump it and move on.
Before you jump in and make your buy, have a plan in place. Here are the questions your plan of attack should address: What is my time frame for this investment? Do I want to hold this stock both long- and short-term? How big of a position do I want for each time frame?
One of the big mistakes many investors make is not being aggressive enough when the time is right. It can be quite difficult to shift from being patient to taking aggressive action.
Eventually you will have a number of good investments going, but the most important thing is to keep looking for more and better ones. Shark Investors are never satisfied with their holdings. They are always looking for something better and are prepared to cut their weakest holdings as soon as they find something with more promise.
