So I’ve been investing in the stock market since like 2011. During that time, I’ve come to learn a few things about the market that might help some people out there. The most important thing to remember is to never “start freaking out man” like Jim Breuer did in half baked when he left his job all distraught.
Alrigthy then, so disclaimer aside and back from that tangent, the thing to realize in the market is to never just dump a stock because the headlines read that the president might get impeached.
The best thing to do at this particular juncture that the current President, what Joe “Sleepy” Biden call the President during the debate? “This guy!”
Anyway, “this guy”, that being Donald “True Story” Trump is getting impeached or getting investigated for impeachment at the present moment.
Who cares?! Well actually, it is important to care about this, because we can learn something that can help us retail investors in the future.
Retail investors being the little guy out there trying to invest for him or her own self.
What I have seen in the market since Trump took office, tangent time: Trump is the first politician that has given nicknames to other politicians, rocket man, sleepy, the list goes on and on, check out this wikipedia page of all nicknames used by him. What politician does that?!
Anyway, does Trump name calling even matter with the market? Nope. And neither does the fact that him getting impeached or will be impeached. They should change that word impeachment, it sounds nice like a peach, but in reality, it’s sinister, the word impeachement should be replaced with getting the boot.
See back in 2011, the political situation didn’t matter too much when factoring in the price of a stock.
Suddenly, Trump is in office and stocks start to suffer. Sure the whole thing with China should matter because I hear some American businesses are losing profits, which then increase prices for us consumers and then that lowers the value of your money. Then I may not have investable money to invest in the stock market.
So basically if Trump gets impeached or the trade wars do go through, you may not have that much money to invest in the stock market.
Oh yeah and so much for the Chinese paying for tariffs!
But that’s just speculation, I don’t know what effects a trade war will have on stocks, but I do know one thing:
Impeachment or not, people will go and spend on entertainment right now. Trade war or not, people are going out to eat and still spend money. Why?
People aren’t going to lose their jobs because of the trade wars, so you will always have disposable income. It’s mainly those active investors that freak out day to day, so they hear something, then ask their broker or their friend who also has no idea, then they panic and sell at a loss. It’s those who are uninformed that panic first. If you don’t do your research, you will sell your stocks when your fear levels are too high!
But you gotta appreciate the following:
The stock market, goes up and down short term. but long term, it goes up.
Any wonder why the stock market is at an all time high? Think about it, the market has been around since 1817!!!!!!! and now it’s at an all time high. If you look at it like a company, it’s a very profitable endeavor, isn’t it then?
The stock market should not even worry one bit about politics because like it or not, companies raise a ton of capital to increase value to society through the stock market. An impeachment will not interfere with Microsoft’s Azure revenues for example. Or will it?
Analysts get paid to create fear and uncertainty so that you go and sell your stocks, the more movement there is in the market, the better. Why? Trading fees alone! The more trading there is, the better it is for banks, which in a way it’s a good thing, it’s a great thing.
But regardless of whatever politics throws at the market, it doesn’t compare with deep knowledge of the market, something anyone can cultivate. For example, if you do some research in Google, then you’ll realize that Google is a great investment. So much so that I am willing to say the following:
I’ll take your GOOGL stock for $800.
Just drop me a line, and I’ll buy it.
Alright hold up. No one is going to write me because no one is willing to let go of their GOOGL stock for $800 because at that price it is undervalued.
See the thing is, you gotta do what Jim Cramer once said on his show, do your own research, don’t pay attention to anyone and buy your own stocks.
That’s the thing that matters most. Doing your own research and understanding whether you should buy a company and at what price.
It’s the same as buying a Honda Civic at $50,000!
Damn is the the Type R?! Nope. just a regular Civic. Of course you wouldn’t buy the Civic at $50k, “that’s outrageous, it’s madness, it’s preposterous” – Jackie Childs.
On the Civic, you know what market value that is. That’s all that matters in a stock.
Why does knowing the right price even matter? So you can sell it later at a profit!
Politics and a trade war even matter?
In my opinion, business will go on as usual and the World is not going to end, and the market will keep going up and down and up in the long term. Shit that’s what it’s been doing for the last 200 years, so I’m betting it will keep continue to do that.
You just gotta look at the stock market as a whole as a company like Microsoft.
You must lose the short term view of the stocks, you must be careful to override your innate instincts and stay long on stocks. When you invest in a company, the number one rule that Warren Buffett tells us is never lose money. So think of your investment in a company as a loan that you can get out whenever you want.
You never want to sell your stock at a loss. If your stock goes down in value right now, it doesn’t mean it will keep going down.
Case in point, McDonalds. CNBC talks about how much a $1k investment 10 years ago would be worth today.
Long term view.
Think about it, will a company like Apple be here in 10 years? I’m betting yes. Are they innovating, always creating and selling shit? Yup. So that might be a very safe stock to get.
Most important of all, they do have plenty of monthly subscribers to Apple Music, which only charges $10 a month for all the music you can listen to every month, so in many, many ways Apple is a great stock because I think that people will go and keep buying Apple products in the future regardless of whether there is a Trade War or not or Trump gets impeached or not. At $220 per stock is it a good investment?!
It’s all about thinking about whether someone else will buy your Apple stock in the future and at what price, so you think of yourself as a seller of that stock. It’s tough to quantify a stock. Of course Warren Buffett and Charlie Munger have it down to a science. They read into each and every report that comes out, something that most of us don’t want to take the time to do.
That’s the thing about stocks, you have to do your research and invest in companies that will be around forever.
Clearly the best way to look at the stock market is to be a coach and go with the fundamentals. A stock like Apple, a well known respected company all over the world is worth good money, so Apple would be your Justin Verlander. A stock like JC Penney would be your Joe Niekro, well you get my point.
You gotta invest long term in good stocks. And only sell at a profit.
On the next article, I will analyze why Google at $800 is a great stock. Of course the stock is at $1200 right now. I will analyze why JC Penney is a bad stock. What is a stock anyway?