Stock Market For Beginners 2021 - Best Stocks for Beginners 2021
Application form to apply & try and get in my Private Stock Group/Financial Fortress
This is the stock market for beginners 2021 edition! This video should help out anyone who is looking for in-depth stocks for beginners video. I will take you through stock market basics to even more complicated stock market subjects.
How to invest in the stock market is something everyone should know. It is not just about stocks to buy now or stocks to watch. It is about running a portfolio of stocks and doing it in a very wise way. Building wealth through the stock market is one of the best things you can ever do.
In this video, we will talk about what is the stock market, what is a stock, how is corporate structure done, and how to buy stocks, how to sell stocks.
After that we will get into how to make money from stocks, taxes, and stocks, how are stocks taxed, how to value stocks, the mentality I use when investing, and how to research stocks.
After that, we will get into how to diversify a stock portfolio, how to invest based on age, options, and leverage, how to value growth stocks and I will give you examples of great stocks for stock market beginners. I hope you enjoy this stock market for beginners 2021 video!
Want to join our free STOCKHUB discord chat? Here is the link https://financialeducationjeremy.com/…
This is where you can chat for free with other investors in the stock market about individual stocks or things going on in the market. Enjoy!
*My Instagram is: FinancialEducationJeremy
This is a Jeremy Lefebvre Production
Created by Jeremy Lefebvre
Stock market for beginners 2021 edition welcoming guys, I do these videos each and every year, this is to help out the folks that are just getting in the stock market or maybe you’ve been in the stock market, but you need a lot more guidance. I hope this video helps you out tremendously. We got so much to get into.
Okay, we’re going to talk about all the basics you need to know when it comes to stock market investing, like literally like, what is the stock market? What are stocks? How is corporate formation done? Like, what is a CEO? What is a board of directors who votes in like a CEO or board of directors and things like that? We’ll talk about corporate formation, we’re going to talk about how to buy stocks, how to sell stocks exactly how I do it.
Okay, so we’ll cover all those basics, then after that, we’re going to get into the moderate section. All right, and we’ll talk about ways you can make money in the stock market, some people think there’s just you know, like one way to make money in the stock market, there’s actually a ton of ways you can make money in the stock market.
So we’ll talk about that. We’re going to talk about taxes and stocks. How were you taxed on money? If you make money in the stock market? It’s actually a little different, depending on your situation than a usual situation. Okay, then we’ll get into how do you value a value stock? How do you know if a stock is a good deal? Or not? Alright, so we’ll get into that.
Then we’ll talk about the mentality I personally use when I’m investing the thought process, the psychology I use for investing, okay, because so much of investing is a mental game. And then we’ll talk about how do you research stocks? Like what do you actually look for, like, what what type of reports you reading and things like that, we’ll get into that.
Okay, that’s a moderate section. And then last, I left up the more complicated section. Okay, now, this isn’t even like super, super, super complicated stuff. But we’re getting more to that side toward the end of the video. Okay. We’ll talk about portfolio diversification, where like, how much money should you have in certain stocks and things like that? We’ll talk about how to invest based upon your age.
So if you’re 45 years old, and you’re watching this, how do you invest? If you’re 20? How do you invest? Okay, we’ll talk about that. We’re going to talk about options, stock options, we’ll talk about leverage, because those are terms you’ll hear in the stock market. Like if you start stock market investing, you’ll hear things like, you know, somebody bought us a bunch of call options, if you don’t even know what that is, like, I don’t even know what that is, what the heck is that? So I’ll explain to you the base around that.
Okay, then after that, we’re going to get into how do you value growth stocks a very complicated subject, I’ll kind of give you a little insight there. And lastly, I’ll give you some some, you know, what I feel are great beginner stocks for people that are newer to the stock market that have been investing for a year or less the type of stocks that are usually good for beginners out there, because it’s so important when you’re getting in the stock market at first, your stock market beginner, right?
Like the most important thing is you get off to a good start, and you start having some success. Okay, so this is going to be a value packed video to the sky. Literally, all I ask is that you guys smash that thumbs up for me. So it helps us out in the YouTube algorithm.
And that said, Okay, I appreciate all you guys. Now, if you don’t know anything about me, because these videos usually get a lot of views over the course of a year or two. And you might have never seen one of my videos, you might have no clue about me. You might be wondering, are you in the right spot, you’re definitely in the right spot for this video. And you’ll want to sit tight for this whole one.
Okay, so in facts about me, I’ve been investing in the stock market seriously, since 2008 2009. I was a stock market for beginner at one time. So I always try to think when I’m doing these videos, I try to think back to that time period, and the type of things that you know, trip me up or the type of things that like I needed to know and those sorts of things. So I’ve been doing this since then I hit $200,000 just in stocks alone, before I was age 25. And that’s always something I’ll look back and be very proud of.
Okay, well, that was while working at convenience store as a manager. Okay, I’ve been on YouTube since 2016. And I have literally, I don’t know, probably like 1000s of videos between different channels. And so you know, if you know me, you probably know me from YouTube.
I live in Las Vegas, mainly I’m at my Arizona house right now, we have a second house out in Arizona but I mainly live in Las Vegas, I have millions invested in the stock market the majority of my personal wealth is tied up in the stock market so like I actually do this for a living I’m not just like putting a video together like some people you know, do these videos and like didn’t even have much money at all invest in stock market.
And they you know, want to teach people it’s like you got to put your money where your mouth is and that’s something I do every single day in and day out. I got a wife I got a couple kids I’m 31 years old here today.
My my work day usually just consists of researching stocks, investing in stocks, making YouTube videos and dealing with my private stock group. And then some funny things about me I can’t spell people know that if they watch my channel, I can’t pronounce certain words. A lot of people know that okay, and I got a handwriting of a seven year old and you guys will probably see that throughout the video.
I try to write this neat. This is me writing neat for you guys. Okay, so anyways, we got a lot to get into. Hope you guys enjoy this. Like I said, if you don’t mind, just smash that thumbs up button. That helps us out huge and the YouTube algorithm that’s all I ask if you want to join stock club. It’s absolutely free to join in there. That’s a stock market.discord chat, and that’ll be linked in the description.
And without further ado, let’s get into this already folks, let’s start getting into this. Okay, so first off all we’re going through the basic section here. Alright, so on the basics, what is the stock market literally? Okay, so you’re going to hear like the nysc, the New York Stock Exchange, the NASDAQ, things like that, okay?
Basically what they are is markets where shares are traded back and forth. ownership in corporations are essentially traded from one investor to another or trader to another, okay? There’s buyers and their sellers of pretty much every single stock every single day, okay, somebody wants to sell Apple stock today, and somebody wants to buy Apple stock today. But usually, since the stock market is so big, there’s actually like, huge numbers.
And I mean, absolutely huge numbers of buyers and sellers, literally every single day, like a lot of these stocks are trading like millions of volume or 10s of millions of volume, day in and day out. Right now, the market, as far as the stock market is usually open Monday through Friday, holidays, obviously, it’s different.
It’ll close sometimes for holidays, and things like that. And the hours vary depending upon where you live in the world. Okay. But Monday through Friday is usually when you can do business, and it’s usually in the morning to early afternoon is when the markets open. Alright, but obviously, depending on where you’re watching this in the world, the hours will vary.
What are stocks? If you buy a stock? What the heck does that even mean? Okay, stocks are actual ownership in public companies. And a public company is essentially a company that you and I can buy into, okay, there’s private corporations, which is like, I don’t know, the local automobile dealership, that’s probably not a public company, right? For the guy that’s got a landscaping business over there, you can’t just buy ownership in that it’s not like it’s listed on the New York Stock Exchange or something like that, like that’s his private business.
If you want part ownership, you need to talk to him and try to work out a deal, right? These are like usually huge corporations that are billions, 10s of billions, or hundreds of billions, or even nowadays, a trillion plus dollars in valuation that you can actually buy part ownership in, okay.
And that’s the way to always think about it, you’re actually becoming an owner of this company. So if you say, if you look into Apple, and you know, Apple Corporation, right, we all know Apple, make Macs and iPhones and iPads and all these sorts of things, right. And air pods, you say you look into Apple, and you like I like Apple as an investment, they make a lot of money. I’ve looked at the valuation, I’ve looked at the earnings, I looked at the income statement, balance sheet, things like that. Great.
So now you want to go ahead and buy Apple stock. All right, you buy Apple stock, you are now literally part owner of Apple Corporation. Now mind you, if you buy one share just a few shares, you were very, very, very, very small owner of apple. But nonetheless, you are literally an owner of the corporation now part owner of the corporation now, and that is pretty dang cool. And that’s something that always attracted me to the stock market outside of just like being able to make a lot of money in the stock market is like actually becoming an owner of these corporations that continue to grow and thrive.
And you see these companies get bigger and bigger. And it’s like, you know, if you’re just a consumer of them, you know, you’re not really like you’re not getting into the joy, right? But when you come become part owner of these corporations, and as they do good, and they launch a new product that does amazing, a new service, and that stock price goes up, you get to participate in that. And that is the beautiful thing about the stock market.
Okay, now let’s talk about corporate formation for a moment here. Okay, so corporate formation. At the top, you have the owners, the shareholders of the corporation, which if you bought, you know, some shares of Apple, let’s imagine that k, your shareholder, the company, now, you’re a part owner, and you’re at the top, okay? Now, as a shareholder of the company, you get to vote for the board of directors, and everybody vote, everybody’s votes are tallied up to see who got voted in or who got voted out of the board of directors, okay.
Now, the Board of Directors super, super important. If a company is doing really, really bad, like, you know, the stock price is going down, revenues going down, profits going down, all those sorts of things, the Board of Directors is going to get end up getting voted out by the owners, the shareholders are going to vote out that board of directors, okay.
The Board of Directors is who decides who’s the CEO, CFO, CEO of the company, okay, so you actually aren’t directly voting for the people that are running the business. But you are voting for the people that make those decisions on who’s actually going to be the bosses of the corporation. And that’s really important.
So you’re at the top, you got the board of directors, right. And under that these people aren’t making the business decisions for the company day in and day out. It’s not like they’re deciding whether to, you know, launch some new product.
It’s not like these guys or gals that are on the board of directors. It’s not like they’re saying, you know, let’s say it’s Apple, Apple’s Board of Directors, not like they’re saying, Hey, we should launch a 14 inch, you know, new MacBook next year, they’re not making those decisions. They’re making these sorts of decisions and some other big decisions. K, the CEO, the CEO is essentially the big boss, it looks over the entire organization.
And at the end of the day, like they’re the face that organization if things go really well, you know, everybody applauds for them. If things work Really bad. They’re, you know, obviously going to be out likely very soon.
They’re like the the quarterback of the team, essentially. Okay? Everybody’s looking at them. And that’s the face. The CFO is responsible for all the financials. Very, very important position. And sometimes if a company loses a CFO, you know what ends up happening, a lot of times their stock price goes down big time.
It’s usually a lot of people don’t like that. Okay. A C O is essentially the chief operating officer. And this is kind of like the business runner. It’s arguably one of the most important positions in entire company, if not, you know, obviously CEO is always the most important, but I think, you know, CEO is actually number two, so many people put credit and CFO, CFO, super important, but I think the CEO is actually more important under that you have other executives, you have under that you have middle managers, and then you kind of have everybody else. Okay. And so that’s how big corporate formation is done.
As far as how many people are on the board of directors, it depends on the company. Sometimes it’s like six 810 12. I’ve seen many different numbers out there over time. Okay. So that is huge there. Now, how do you actually buy and sell stocks? All right? Well, first, you need to set up a brokerage account, it’s going to be like an online brokerage account, there are a million different companies you can use.
Okay? depending upon where you’re watching this in the world, some of these companies I have up here might be available to you, some of them might not, it depends. Not every company is available in every market, okay. But I can tell you, like the majority of people that watch my channel are on one of these three platforms, specifically, Robin Hood, fidelity, or TD Ameritrade, those are the three biggest for the people that actually watch my videos each and every day.
Those are the three biggest four people that are in my private group and things like that, okay. And those brokerages all offer free trades, essentially, meaning, like all you have to deposit is whatever amount of money you want to buy for the stock, you actually don’t have to pay a commission, every time you buy and sell, they used to be back in the day, like when I got started was like $20. commission every time you bought or sold a stock that no longer is like that.
Okay? Personally, I’ve been with Fidelity Investments since 2008 2009. And I have nothing bad to say about the company. And so, you know, take that for what it is. But you know, when you do business with somebody for, you know, well over a decade, and you have nothing bad to say about them, that’s probably a pretty good sign for a corporation out there. Right. So those are the three main ones.
But like I said, there’s a million others you can do, okay, as far as when I go to buy a stock, if the markets open, and it’s during trading hours on Monday through Friday, and the markets actually open and I’m going to buy us shares in the company, what I will do is I will buy them at market price, I get to see what the company is trading at, you know, you can download something like the stock tracker app and keep track of all your different stocks, you can see exactly where it’s trading at that particular time.
You can also see, you know, the live action of that stock being traded on these different apps like Robin Hood, fidelity, TD Ameritrade, things like that, so I get to see that. So I’m going to go ahead and buy it basically, at a market price, you’re going to say market order. And that basically means it’s going to get traded, as soon as you hit that button is going to get traded at whatever, essentially the stock price is pretty much trading at right after you hit that button. Okay.
And that’s usually good for me, I’m not worried about one penny here, one penny there, I’m making long term investments in companies. If I’m worried about a penny here, Penny there, you know, it’s probably not the right investment. For me, I’m worried about making, you know, let’s just say a lot of money in a stock not worried about a penny here, Penny there.
Okay, as far as if the markets closed, you can still put in a buy order for a stock it won’t go through unless we have like after hours trading or something like that on which this is a stock market for beginners video. So none of you guys will have like after hours trading or anything like that enabled on your accounts.
But essentially, if I’m putting in an order, and the markets closed, I like to put it for a certain price, because you never know how the stocks going to open that next day, it can open way up way down, you know, you don’t know. And so you could end up paying a really bad price. So if it markets closed, I want to buy a stock, I’ll put it so the next day it will buy but it will only buy it if it’s if it hits a certain price.
Now if it doesn’t hit that certain price, the shares don’t get bought, right, you put in a buy a market price when the markets open, it’s getting bought at whatever price happens. But when it’s at a certain price, it will only get bought, if that price gets hit, okay. Same exact thing when it comes to when I go to sell a stock if the market is open, I will sell at market price like because I get to see what it’s trading at.
Okay, let me sell it at market price. Okay, now, if the markets closed, I will put once again it to sell at a certain price because I wanted to you know, obviously I don’t want to get you know, a bad deal on the whole situation. Okay, so this is your base base information around the around the stock market. And like I said stock tracker app is a phenomenal one.
As far as an app to download. I use Yahoo Finance, as well. I use CNBC for keeping up with big information because CNBC usually breaks a lot of big news stories before others do and things like that. So those are kind of some of the main apps I use or other apps out there. But this is the base base information for stock market beginners. Okay, now we’ll get into the model.
We’re gonna talk about the ways you can make money in the stock market, we’re gonna talk about taxes in stocks. It’s always a popular subject. We’re gonna talk about how to value value stocks, we’re gonna talk about the mentality I personally use when investing in.
Lastly, we’ll talk about how to research stocks, and then we’ll worry about getting to the complex hope you guys are enjoying this already, folks. Now it is time to get into the moderately complicated subjects. Okay, so now we’ll talk about how to make money in the stock market different ways.
We’ll talk about my mentality, we’re talking about how to research stocks, what to look for, we’re talking about how to value value stocks. And lastly, we’ll talk about taxes and how that whole situation works. Okay.
So ways to make money in the stock market are many different ways. Okay? The main way, the main way to make money in the stock market is to buy low and sell higher, so buy a stock for $1 and sell it for $2. Essentially, okay, or whatever price, it is just the bottom line is selling that stock for more than you paid for overtime.
That’s how most people make money in the stock market. That’s how I make the majority of money I make in the stock market, when I sell for gains, I make way more money off that than I actually do from dividends, I receive a good amount of dividend money each year, which dividends is another way you can make money in the stock market that’s essentially money that’s paid out to you from these corporations that you own stock in.
And it’s just like part of their profits, they take it and they pay it off to you as shareholder, you can see all this information even on something like Yahoo Finance, you can see their past dividend history, you can sort through that you can see their dividend yield, all those sorts of things, okay.
But then a day like this is, this is like how I when I you know, make money from the stock market, the majority of the way is from doing this and not from dividends, okay?
But dividends is phenomenal, and you build up that dividend cash flow, you get those dividends thrown off to you, and then you can do whatever with that money, like you would go spend that money if you want, what most people you know, do with that money essentially, is you put that into more stocks, or if you’re just focusing on dividend stocks, you put into more dividend stocks, you build that pile of money bigger and bigger, and then the dividends that are paid out to the next year, or even bigger than the previous year, and you put even more money into it.
And like the pile just grows and grows and grows. And you know, somebody like Warren Buffett, his company, Berkshire Hathaway, they make billions of dollars a year in just dividends that are thrown off to them from huge corporations out there. It’s unbelievable.
Okay, now, obviously, you know, not everyone’s gonna get to a level where they get billions of dollars each year thrown off to them and dividends. But if you focus on dividend investing, let’s say over 10 2030 years, that’s definitely a good probability, you can get to a place where you’re making 100 k plus a year, just from dividends, okay, options, another huge way that people make money in the stock market, but when it comes to options, people lose a lot of money in options as well.
Okay. So you know, stock options, you know, whether you’re talking about like selling premium writing calls, or writing puts, or whether you’re talking about, like, you know, basically buying call options, buying put options, things like that, it is a way you can potentially make money in the stock market.
Most people that straight up buy calls or puts, although sometimes those can hit huge, most times those expire worthless, just something to keep in mind there. Okay, you can make money from short selling stocks, obviously, all these ways you can lose money, but you know, short selling stocks, it’s a tough thing to do. The reason is the stock market mainly goes up, stocks mainly go up most of the time, right.
And so short selling is very difficult to make money over time short selling stocks, what you’re doing when you’re shorting it’s essentially, you’re betting that a stock price will go down over time. So most the time, if you’re in the stock market, you’re going to buy a stock, because you believe it’s going to go higher in the future, the company is going to be at a better place in three years from now, five years from now 10 years from now than it is today.
But when you’re a short seller, you’re betting that a stock is going to go down and the company’s going to get worse and worse over the coming years. Okay. And so it’s a really tough thing to make money, but some people make some money here and there short selling, okay, buy low, hold higher. So this is it. If you’re just holding a stock, you didn’t technically make money, but you are kind of making money.
So think about it like this, right? If you buy a real estate property, right, let’s say you just buy a house, and that house, you buy it for $300,000. And over time, that house is worth $500,000 Well, you haven’t sold it yet.
But at the end of the day, like that house is worth $200,000 more than you paid for it, you could sell it today, if you want and take that game, maybe you don’t want it you still want to live in that house, right? But then the day like your wealth is still basically increased $200,000 same thing in the stock market, you could buy into a corporation, you don’t have to sell it and at the end of the day, your net worth is going to be higher your accounts gonna say a bigger balance, right? and things like that.
So you know, those are the main ways you can make money in the stock market out there in this one obviously being the biggest of those, okay, my mentality when it comes to stock market investing, very, very important. Okay, so I always look at companies from like, what is this company going to likely do over the next three to five years.
That’s the main time Frame I’m looking at, you know, if we’re talking about 710 years out, it gets a little hard for me to really foresee what’s going to happen because so much stuff can change, man. I mean, this is, this is the world world’s crazy we just had in 2020, a once in 100 year health event happen around the globe, right? Shut down global economy, who could have foresaw that like, that’s just crazy, right.
And so, you know, I’m trying not to look super super far in the future, because you just never know what’s going to happen. I’m trying to really focus on what’s going on over the next three, three to five years with this company. And I’m going to research it heavily. So I understand it on a super high level, where I can make a bullish thesis on it, which bullish bullish thesis is essentially, like, why the stock is gonna go up over time, I can make that bullish thesis around the stock, and go ahead and hold it, and it can make me a bunch of money.
And I can sell out a stock hopefully a lot higher, or I can be in a situation where I’m just holding it. And maybe it pays me off dividends or something like that, that’s phenomenal as well, that’s my mentality, I don’t get caught up into all the short term stuff, you know, you’re going to hear about terms like day trading, you’re going to hear about swing trading, you’re going to hear but you’re going to hear about so many different things, if you’re in the stock market, okay, I don’t get caught up into any of that stuff, I am focused on making business decisions.
That’s the way I personally view it, I’m making a business decision to take my money out of my pocket and put it into this corporation over here because I believe by putting my money over there, is going to grow to double the price or triple the price over time. And the majority of stocks I’m getting in, I’m trying to double my money or more over the next five years in that stock. Very rarely, I will invest in a stock if I don’t think it has at least the potential to double its stock price over the next five years doesn’t mean I’ll never consider it.
But most of time from investing a stock is because I believe that stock is going to to x by money or more over the next five years, pretty much regardless of whatever happens in the market. Because you know, sometimes we’re gonna have boom markets, bull markets, where the markets going up like crazy.
You’ll hear that term bull markets just means the stocks are going you know, up, up, up, sometimes you’re gonna have bear markets with stocks just going down, down, down, sometimes you’re going to have, you know, a kangaroo market, which is essentially a market that’s, you know, it’s not really going anywhere, and it’s just jumping up and down. I want to be in the type of stocks and the type of corporations that are going to make tons of money regardless over the next five years.
And the type of corporations that I feel are very undervalued at their current prices. That’s the mentality I use, and everything else is just a distraction. I mean, everything else is just a distraction. And it’s like, keep that away on making business decisions on making investments in corporations, okay? You know, other people, if they want to try to trade in and out of stocks and get in and out of them every day, do whatever you want to do. That’s not my, that’s not my strategy.
That’s not my mentality. I’m doing my thing over here. Okay. So that’s my mentality. Now, how do you actually research the stocks? Okay, well, first, the stocks have to come to you, you have to, you know, maybe you look, you were in the grocery store, and you found some product you like, Huh, this product sells? Well, I love this product, or I see everybody buying this.
Let me look okay, with this company, you look at the back of the product, okay, this company, you know, makes this product. Let me go ahead on my phone. Everyone’s got a phone in their pocket, right? Let me Google and see if this is a public company. Sometimes it’s going to be a public company. Sometimes it’s not okay.
And so you can go ahead and you can start researching from there. Now in terms of you’re trying to get more stock ideas, okay. Like you can watch networks like CNBC, Bloomberg and things like that. They have ticker symbols that go like on the board and you can just like, like, look at it and be like, oh, there’s that ticker.
Let me just type that in on my stock tracker app or Yahoo Finance or whatever. And see, like, what that is, okay. Maybe you hear somebody talk about you can read articles Seeking Alpha places like that, you know, those are definitely places that you can check out Seeking Alpha is a place where people just write articles about stocks all the time.
I can tell you stock hub, it’s my free discord chat I made like all people do in their every single day is talk about stocks in different stocks and why they think this stocks good and this stocks bad and things like that. Like I mean, I don’t know how many ticker symbols are mentioned in a given day and stock hub during the trading hours. It’s probably in the hundreds if not in the 1000s. Okay, so I mean, the amount of of action you can get from just joining somewhere, like that’s phenomenal.
I’m getting honestly and then I have my private discord chat which link is available my private group, I get at least 50% Plus, if not 75% Plus, of my stock picks nowadays from actually inside my own private groups discord chat, because some, you know, everybody’s like, you know, basically has my same mentality.
So now I have 1000s of people that are in this group that have my same mentality and are basically sifting through stocks all the time. And like, you know, some stocks are looking down, like, that’s not a good one.
Sometimes I’ll look into and it’s like, this is amazing. So stocks can come to you from a million different places, there’s no shortage, you can literally go on google and type in s&p 500 stocks and look at a list of the s&p 500 or Russell 2000 stocks and like look at all the stocks in the Russell 2000.
There’s no shortage of stock ideas out there. Now once you have the stocks that you want to look into, then you go to their Investor Relations page.
So if you wanted to look into Tesla stock type in, go into Google type in Tesla Investor Relations, first thing that’s going to pop up is going to be Tesla Investor Relations page, you can click on that. And in that Investor Relations page is almost all the information you could ever ask for on a corporation, okay? You can go to their documents, you can go to their their basically latest press releases, everything like that. Okay.
So once you’re on the investor relations, where I like to start as a 10 k annual report, if this is a new company I’m looking into that I’ve never looked into before, okay, that report is going to give you a such a great rundown of everything that that company has done over the past few years, why this has happened, legal things that are going on, like the business strategy, everything is amazing. Okay, it is absolutely amazing.
So before you actually look at the 10 Q, which is the latest, like the essentially the last three months of the business, look at the last year the best, and then you can worry about the 10 q after that.
But the annual report, it is the best thing you’ll ever, if you’re thinking seriously about investing in stock, this is what I would say over everything else, everything else after that is secondary. Okay. From there, I might look into the 10 Q, or I’ll go ahead and listen to the latest conference call.
Basically, almost all public companies have conference calls every three months. Okay. And that’s to basically analysts can ask them questions about the latest quarter, and then usually, the CEO and CFO were on there, and they’re talking about the numbers and why they had revenue go up or down or profit go up or down and how the business is looking and things like that, you get so much great Intel in those conference calls that can help you make an investment decision.
And sometimes you can even go to conference calls in the past, okay, now with conference calls, these are these are usually 30 minutes to an hour, depending on the company. Okay? What I suggest you do when it comes to conference calls, okay? Is
do it like late at night or something when there’s no distractions?
And don’t multitask, we’re in we’re in this, like whole world nowadays where everybody wants to try to multitask everything, and everybody wants to be doing 234 things at a time. Okay? No, no, don’t do that.
When it comes to conference calls, okay? You focus in on that, like, it’s the only thing you’re focusing in on, don’t worry about who’s texting you don’t worry about social media. Don’t worry about watching Netflix and trying to listen to conference calls simultaneously. I’m telling you, when you’re listening to a conference, call it you just fully engaged in that.
And you just focus on that. Okay, as far as you know, the annual reports, 10, KS, I always hear from, you know, beginners in the stock market, they say things like, oh, man is a big report, it’s a lot to read.
Man over time, you’re going to get so fascinating that when I first started investing in stock market, a 10 k annual report, it took me sometimes a day, two days to go through it, sometimes three days to really go through it right. And I can tell you nowadays, I can go through one of those and retain the information, like two hours, I’m good to go. So you just get faster, you get better at reading those sorts of things you get you learn what to kind of look for and what not to look for over time.
And you’ll go through so much faster. And yeah, the conference calls lock in and everything else, don’t worry about it at that particular time you’re locked in, okay, latest investor presentations. So corporations, a lot of times we’ll do like investor presentations, you can go ahead and you can look at those investor presentations, those will give you a ton more information about the company with their strategy where they’re going.
A lot of times, these companies will do basically big ones with like Goldman Sachs or JP Morgan or Bank of America or some of these other ones. And they’ll give out a ton of information about their company.
And sometimes information that you never had clue about. Even if you’ve read the 10 K, even if you listen to these conference call, sometimes they’re going to divulge information in those investor presentations, or those analyst days or whatever, that you had no clue about. And, you know, whenever you can get information in the stock market, that not everybody knows, it’s always a good thing, right? You want to do it legally. And this is a way you can legally do it.
But sometimes I’m telling you, sometimes he’s his executive slip up, and they give you some information that, you know, other people just don’t know about. Because they’re not doing the work. As with most things in life, the more work you put in, the better your results are going to be over time.
And everything’s cumulative in this game, right? Everything’s cumulative. So if you if you’re putting in a lot of work over the years, and you continue to you’re going to get better and better and better at these things. Okay, there’s something really, really big. It’s just the name of the game. Okay, so definitely, those are huge.
From there Google News about that company, try to find you know, what’s been in the news lately for that company? what’s been going on with them any recent lawsuits or legal things going on, or anything exciting developments that other people might not know about? So Google News it Okay, from there, I’ll go ahead and I’ll look at like, what are other people talking about this stock.
So if I’m looking into some stock, I might go on YouTube and like, type that stock directly into YouTube and see if other people have made videos about it, and just see if there’s any thing I’m missing or any other perspectives to look at. I never make an investment decision. Go back to my mentality.
I know Never make an investment decision because somebody else’s, if somebody else is buying that stock, I don’t just go say I’m gonna buy the stock because they’ve had success or something like that. I don’t ever make that or somebody says this is a bad stock, I don’t just say Oh, they said, that’s a bad stock. So I can’t buy, I never make a decision based upon another person’s opinion.
However, I am always willing to respect people and willing to listen to them, listen to them, and just hear what they have to say. And then in my head, I can say that’s a bunch of crap, or they got a good point there is going to be probably one of those two, or maybe it’s something in between, right.
And so I’m always willing to listen to other people’s, you know, two cents. Also, when you Google News, you’re going to find people have written articles about these stocks. And sometimes you’re going to find different perspectives to look at things. Okay, so yeah, that’s big. From there, we’ll do basically field research, depending on the company.
And if I can actually do field research sometimes, with like, internet based companies, you can’t sometimes do field research, but there are a lot of companies you can I’ll do what’s called channel checks, which a channel check is essentially looking at, like how a business is doing, like, are they busy? Are they not busy? Are the products selling? Well, things like that.
So, you know, just some examples of companies, you know, over the past year or two that done channel checks. And there’s a lot more in this, you know, I was invested in this company named national beverage Corporation, they made the Lacroix product. And basically, right after, you know, the Roni Roni had started, everybody was buying water left, right. And so I was think about like, waterplace.
And I was think about, well, I could buy into Coca Cola they own to Sony, but I was like, Ah, you know, it’s not a big enough mover for their business. And I was thinking about awkwafina, which is owned by Pepsi, but that wasn’t a big as a big enough move or either.
And then remember, national beverage Corporation owned sparkling water beverage, and I was like, Oh my gosh, that self has probably gone up in that stock happened to be a beaten down stock at that time, it was like 30 something dollars a share, like $38 $37, something like that. And so I would go to stores.
And sure enough national beverage, you know, Lacroix products were out everywhere, or like very sold through because people were just buying anything in relation stocking up on these things. And I’m like, Oh my gosh, this is a perfect scenario for stock. Guess what? That stock, I invested in that stock quite a bit of money. And I made it was one of my biggest winners of 2020 overall, and that stock over doubled up in a matter of like six months, it was a beautiful, beautiful thing. And those channel checks helped big time.
And actually in my private discord chat, I ended up actually opening a tab back then, it was essentially every time people in the group which there’s 1000s of people in there would go to like a grocery store or something, they would snap pictures of the shelves of their store.
So often I was getting information from literally all over the world like on a scale like artificial intelligence type stuff is beautiful. Okay, absolutely beautiful Elf on a shelf. This was a cosmetics company I was invested in I’m still invest in a company. It’s been a double up triple up type company, where I’ve just made incredible money and do channel checks.
I’d go Target stores in all 10 different stores and see like what’s the sell through the for their products. And when I was investing that when I saw sell through was really strong. When in 2021. This is an investment of mine invested, you know, six figures on Vegas, I pointed at this, like I’m in Vegas, I usually have a picture of Vegas at my Vegas house.
But when I invested over six figures in the stock, Wynn resorts, I’m going to be going into their properties plenty when I’m out in Vegas in 2021. And trying to see like how businesses or we know as people start to, you know, get the running round of shots, essentially, or does when start to come back. Does Las Vegas start to come back?
And I’ll be going down there and seeing like, what is the gaming action? How are things during the week, how are things in the weekend is business slowly starting to come back and those sorts of things, k channel checks, the tattooed chef, t TCF one of my newest investments, so bullish on a company, I do channel checks.
every single week, I’ll go to Sam’s Club or different stores target Walmart, where their products are sold. That is I’m trying to see like how the sell through is are the products on the shelf? Are they getting you know, are people buying them and seeing things like that.
So, you know, that is how you research. You know, it’s it’s a lot of this is the work that comes with stock market investing, okay, there is work if you want to make a lot of money in the stock market over time. It’s out there to be made, but you got to put in the work. And like I said, with most things in life, the more work you put in,the more success you’re going to have the luck you’re going to get.
There’s a great saying like the more work you put in the luckier you get. Okay, something to be said there. All right. Now let’s talk about how to value value stocks. So value stock First off is a company that is expected to have revenues grow 5% or less per year.
All right, these are traditionally known as value stocks, but they’re not stocks that are necessarily they’re going away tomorrow or something like that. Are they like going to go bankrupt? No, that’s not a value stock is like that consistent growing company is going to grow revenues 1% 2% 3% 4% maybe 5% a year that’s a value stock because you’re there not a growth stock growth stocks are like growing revenues 10% plus 10. So that’s a value stock. You’re looking for Pease price to earnings ratios under 25 is ideal for value stocks.
If it’s over 25 and it’s a value stock You’re probably not getting a very good deal. I’ll be honest. Okay, so you’re looking for peas under 25. If you can get p a p under 20, that’s really, really good. Okay, for a value stock. Now, you also want to see a forward p lower than a current p Yahoo Finance, you can go to statistics tab and see what analysts have, you can also start, if you understand the company well enough, you can start formulating your own opinion on what you think the company will have for profitability, net income over the next year, you start figuring out that Ford P is in the right place or not.
And so you want to see a four p lower than the current p, the reason being is that means the company will be more profitable in the upcoming year than the past year. Super, super important. You want a company that’s consistently increasing profits, if you’re investing into a value company, that, you know, growth companies, it’s like profitability can kind of be pushed back value stocks, profitability is everything. net income going up over time is everything, okay? Now, you also want to if you’re looking at value stocks, you want to make sure they have plenty of cash around, and you know, ideally, more cash in debt.
Now, that’s not always going to be happening, because essentially, we’re in this time period where debt, you can take out debt for such low interest rates. It’s unbelievable. So why these companies are taking out debt. So it’s hard to find companies right now they have more cash on their balance sheet than debt, but that’s ideal.
But then the day you want to find, if you’re looking to value stocks, you want the type of companies at plenty of cash around, you know, 500 million cash, a billion cash, 2 billion cash, something like that, that’s going to get those companies through a bad time, or a once in 100 year health event, or things like that. Okay, so you want plenty of cash, you’re going to find that on the balance sheet.
Okay, the balance sheet, very, very important. And really looking at the cash, short term investments, long term investments versus short term debt, long term debt, okay? Keep that in mind. And capital leases not as important capital leases are sometimes counted in, in long term debt.
Now, he’s kind of going a little more complicated for you guys, that stock market for beginners, and I’m sorry for going off on more of a complicated subject here. But essentially, capital leases are starting to count that in long term debt, you always want to kind of break that out. And a lot of times companies will on their balance sheet and you can see what’s capital leases, and what is true long term debt.
I don’t like the move they made when they put capital leases, because now if you have an office that has a 30 year lease that counts as like long term debt, I don’t think it was the right way of doing things. But I don’t make up the accounting standards. And now all companies have to abide by it. So it is what it is. Okay. And if I lost you there, because that was confusing, I apologize. Okay.
But if any sophisticated people are out there, I hope you enjoyed that perfect there. Okay. All right now, income, you want to see improving revenues over the past three years, the past three years, over the past 10 years, 20 years, who cares?
The past three years, you want to see did revenue improve over the last three years, you also want to see improving net income, which is bottom line revenue, you’re going to hear talked about his top line, net income you’re going to hear talked about as bottom line, okay? You want to see improving net income over the past three years.
Remember, when it comes to value stocks, the net income improving over time is actually more important than the revenues improving over time. When we talk about growth stocks, it’s its inverse.
Essentially, with growth stocks, it’s all about growing the top line the revenue more and more over time, and everybody takes a backseat to net income, complete inverse with value stocks, it’s all about did they grow their net income at a much faster rate than anything else out there? Okay, we want to see improving over the past three years, you want to see a proven management team.
You know, if you’re investing in these type of companies value stocks, you have to have a proven management team there grow Sox, you know, it can take a little bit of a risk, and maybe they don’t have a lot of experience or something like that. But with these companies, you know, because the upside is limited. You want a proven management team there that knows how to do it, okay, and dividend yield. Ideally, 2% more or more is ideal,
if you can get into a stock like that, because that means essentially, if you’re invest in the stock, you’re getting way more than you can get in a savings account, because in 2021, ya know, it’s almost impossible to find savings accounts that are paying 2% plus for your on your money, almost all of them are paying one 1% or less than 1%. Now, okay.
So dividend yield over 2% ideal, the higher the dividend yield more more more attractive, likely value investors are going to be to that particular stock and those people that are looking for dividend cash flows out there. Okay. So, that is the base fundamentals on how you value a value stock.
We could go more, you know, in depth there, but that’s that’s, you know, your base fundamentals on what’s really, really important when you’re looking at a value stock. Okay. Let’s talk about taxes for a moment. All right. So obviously, the taxman wants a cut of everything all the time, right.
If you make money any way possible, the taxman wants a piece of it, right? So first off, you know, international folks if you’re watching this and you live in Europe or you live in I don’t know Latin America, or you know, wherever and you’re watching this tax rates could be different where you live, okay, I’m, I live in the United States, obviously, and I’m speaking to, you know, US people when I kind of talk about these different tax rates and things like that.
It could be Similar if you live internationally, or maybe it’s not okay. But when it comes to taxes, long term gains in dividends are basically counted as capital gains, okay, capital gains, and you pay different tax brackets for that if you make under $100,000 a year high probability, you’ll be paying around a 15%.
If you take any capital gains, basically any gains you took on stocks that were held for over a year, or dividends received, if you make, you know, half million a year, a million dollars a year, something like that, you’re going to pay 20% long term capital gains on you know, those long term gains, any stocks you held for over a year, you sold it after you held for over a year, or dividends received.
Okay? Now, let’s say you take a short term game. So let’s say you buy into, I don’t know, Tesla stock, you buy in a Tesla stock tomorrow, and let’s say Tesla’s $730 a share, okay. And let’s say Tesla stock goes to $750, a share tomorrow, and you made $20 on that stock. And you’re like, I’m just gonna cash out, I’m gonna take my $20 profit, and I’m gonna go eat a steak tonight out of the restaurant or something like that.
Okay, you know, cool for you. So you went ahead and took that profit, now you have to pay normal tax rate on your money, essentially. Okay. And so, you know, depends on what tax rate you’re at. But a lot of folks are above a 20% tax rate, a lot of folks are at a 22% 23% 25% 30% tax rate.
And so if you’re taking those short term gains, you’re just going to have to pay a lot more money, it’s going to be counted as ordinary income. And that’s not obviously an ideal situation. So that’s another advantage of why it makes sense to be a long term investor in companies and hold these stocks for a year or longer, because you’re just taxed far less, and you receive that dividend money, you’re taxed for less than if you take a short term gain on a stock.
Now, with that being said, I try to never make a decision and investment decision just solely based upon taxes, I’m trying to make a business decision, that is the best place for my money over time. So you know, when it comes to taxes, I look at it, but it’s not the most important factor. All right.
Now, you can write off wins versus losses, okay. So you know, there’s gonna be times when you have to sell stock for loss, you just gotten a bad stock, things didn’t work out, and you lost money on it, there’s gonna be other times when it’ll hopefully there’s a lot more times where you made a lot of money on a stock, right? And so let’s say, you have you bought XYZ stock, and you made a $10,000 profit on that stock.
And so you sell out of that stock, boom, you cashed your $10,000 profit, good for you. Awesome. But let’s say you invested in a bad stock, let’s say z, y x Corporation, and you lost $3,000 on that stock, okay, you basically write those off against each other, and now you only have to pay taxes on the $7,000. Okay, which is very important.
Now, where it gets tricky is if one is a short term loss, and one’s a long term gain, that’s where things get a little a little hairy. Basically, if it’s a short term gain against a short term loss, you can write that off. It’s the long term gain and the long term loss, you can write that off. If it’s, you know, long versus short, things like that, it gets really, really confusing, okay, and it gets to be a messy situation.
All right. Now, Also, keep in mind, you don’t have to pay any taxes until you sell the stock. Okay? So if you have $100,000 in profit you’ve made on stock in it basically an unrealized gain, you don’t have to pay taxes on that yet.
You will have to pay taxes if you ever do sell that stock, though, okay, so that’s something to keep in mind. Eventually, one day, you will have to pay taxes on that, but there are no taxes until you sell a stock. Okay, so this wraps up the moderate section of the stock market for beginners video is next on the stocks for beginners video, we’re going to talk about little more complicated stuff. Okay, we’re going to talk about portfolio diversification.
We’re going to talk about how to invest based upon different age ranges. Okay. We’re going to talk about options. We’re going to talk about leverage margin, you’re going to hear some of those terms. Talk about we’ll talk about that. Okay, we’re going to talk about valuing of growth stocks.
Very complicated subject, okay. And I’ll give you some examples of what I feel are good beginner stocks, for folks that are just kind of getting in the market. And they’re, they’re somewhat new. So hope you enjoy that already. Folks, I hope you’re getting a ton of value out of this video so far.
So now we’re going to get into a little more complicated subject, okay, and a few of them needless to say, All right, now obviously, the stock market for beginners video, but you know, some of these are a little more complicated, especially around like options, leverage. We’ll talk a little bit about that. valuing growth stocks, extremely complicated subject to kind of, you know, give you examples of some beginner stocks, I feel like are good for newer investors, the market and things like that.
Okay, so first off, we’re going to talk about age, you know, a lot of different people are going to see this video from a lot of different age brackets, some people are going to be 18 years old watching this, some people are going to be in their 30s some people are going to be in their 50s 60s not everybody gets in the stock market, like you know, super young like I did when I was like 1819 getting into this game, like some people you know, wait a while it you know, maybe they weren’t focused on it.
Maybe it just wasn’t even in their radar. And that’s just like the way like Sometimes Sometimes, you know, things aren’t on your radar, and all sudden something sparks an idea. And also, you’re like, I’m gonna go look at this thing over here.
Okay, so investing based upon age, so your 20s and your 30s, let me be very clear, before we get into this, okay? in your first year of investing, you should really be trying to take a very disciplined approach in the least risky approach you possibly can your first year of investing. And the reason that’s really, really important is you want to get your confidence behind behind yourself, you don’t want to get tore up in the market, the worst thing that can happen to you in the stock market, is you start investing into the stock market, okay.
And you get absolutely destroyed, because maybe you were messing around with very speculative companies, super high growth companies with super high valuations, and you just get destroyed, because a lot of times, that will ruin your confidence, it will ruin your view of the stock market.
And you’ll look at the stock market is like, this is just a big thing that just takes my money, and it’s just a waste, I invested $10,000 into these stocks, and now I have $5,000 left, you don’t want to start like that, that’s not an ideal situation, okay.
So the first year, you want to take as little risk as possible, and really just kind of getting your feet wet, like, you know, kind of like, you know, dipping your toe in a pool or something like that. Okay.
Now, after that first year, 20s, and 30s is really your time period where you can take the most risk, okay? Now, when I say the most risk, that doesn’t mean let’s be crazy. And let’s just, you know, gambler money around and who cares, we’re young, let’s just throw our money at everything.
No, okay, you still want to be disciplined, you still want to have the right approach and those sorts of things. So you don’t just throw your money out there. But with that being said, you can definitely invest in a lot more growth stocks, companies that are growing very rapidly, then let’s say value stocks, like this is your time to really make a lot of money in the stock market, or try to at least.
Okay, like I said, doesn’t mean you go crazy, and you do all the riskiest things in the world, okay, you want to still be because of the day, you want to have built up to some very nice numbers over that time period in your 20s and 30s. And as long as you were staying discipline, and you’re investing into a lot of great growth companies, good thing, you know, high probability is a lot of those growth companies hit big, and you your net worth, you know, in your 20s and 30s.
Climb to, you know, hopefully hundreds of 1000s of dollars or millions of dollars, that is the goal, that if you’re putting yourself in a situation where you’re, you’re entering your 40s, let’s say, and you already have six figures invest in the stock market, or let’s dare even say seven figures. Now you’re in a really, really good position, I mean, not just a really good position, you’re in a great position for the rest of your life. Now, your life just got a lot easier, financially, forever. Okay, now, 40s and 50s.
This is kind of like, you know, what people call the mid lifetime, okay? And you want to kind of take moderate risk this to you know, just because you’re in your 40s and 50s, doesn’t mean you can’t take any risk.
Remember, like, people are living longer than ever, like, I’ve fully believed like 100 years old is going to be like the norm at some point in time when I look at what’s happening with genomics, and artificial intelligence and all these sorts of things.
And, you know, I truly believe that over the next 5060 years, there’s gonna be so much progress, that I think the average age expectancy will be 100, let’s say in the future, okay, so the 40s and 50s. You know, some people when they’re super young, they look at 40s and 50s. Like, oh, that’s like old? No. Okay, that’s like you’re you’re like midlife essentially. Okay.
So at that point, you can still invest in growth stocks, you can have half your portfolio and growth stocks, and maybe the other half of your portfolio in value stocks. Now, everybody has different risk appetites. So maybe you don’t want to take as much risk.
So maybe you’re 48 years old, and you want to be, let’s say, only in 10%, growth stocks in 90%. value, stocks, respect, everybody’s got different growth appetites out there. But I’d still look at this as a moderate risk stage. I don’t think this is a stage to say unpacking it in, I don’t want to take any more risk. Because I’m, you know, 50 years old now. I’m like, you know, life is like, my life is pretty long, and it’s gonna get longer in the future.
So I think it’s a, it’s a, it’s a wise decision to kind of look at this and be like, let me still let me still, you know, grow my money. Let’s not just call it a day. Okay, 60s and 70s. I think this is a time when you start moving to more low risk, 60s and 70s. And when I say low risk, you start moving to index funds, index funds is just your money essentially distributed out an sp 500.
And however much the sp 500 goes up or down and given years, likely how much your money’s gonna go up or down in a given year. Okay. It’s a very, you know, there’s still a level of risk there because the s&p 500 goes down, you know, you can lose money, but at the same time, like, Where’s sp 500? Going most years up, almost, you know, for every, you know, one year s&p 500 goes down, there’s eight or nine years at the s&p 500 goes up.
Okay. So that’s kind of the age where I say, Okay, now let’s start dialing it back a bit. And let’s take, you know, a lower risk approach with index funds. ETS, that’s, you know, if you make it to your 80s that’s when I say no, right?you know, you get out of stocks, that’s the kind of, you know, savings accounts, CD accounts, don’t even worry about this anymore. So that’s kind of my view on investing in age over time is like you take, you know, you’re more risk.
And then over time as you get older, you slowly take less and less and less risk over time. Okay. But yeah, you know, this is a stage, I think it’s funny, because I like some people I just found like, anything, that’s the time to pack it in and say, No, no, it’s not okay, you still need to be, you know, growing your money and focus on growing your money when you’re in your 40s and 50s. Okay, let’s talk about portfolio diversification for a minute.
All right. So a lot of people always ask me like, how many stocks they should be holding? And I tell them? Well, a lot of it depends upon how much money you have in the market. Okay. So if you have, you know, under $10,000 in the market, you should be holding five stocks or less, in my opinion, once again, this goes back to your risk appetite, maybe you can’t sleep well, unless you have 10 stocks or 15. Stocks, if that’s the situation, do whatever you want to do.
My strategy is if you’re holding less than $10,000 worth of stocks hold five stocks or less, three to four stocks ideal you want to have your money in a couple stocks, he gets some experience with some different stocks buying, you know, if a stock dips, which something I didn’t really touch on much, but you know, buying on the dip when the market, you know, is it a big correction or a full on, you know, let’s say the stock market just goes down a ton, usually a time when you want to buy stocks. Very important. Okay.
I never think I don’t think I mentioned that. But you know, keep that in mind what I just told you there, okay? 10,000 to $50,000, four to six stocks is about right in those ranges, 50 k to 100. k, this is when you start to feel like you’re really starting to build some wealth in the stock market, when you start hitting these like like levels, now you get six to eight stocks, okay. And so you’re you’re slowly adding more stocks as you’re getting more and more money in the market.
100,000 plus k, this is a big milestone, I actually, you know, in my private group every single time somebody hits $100,000 Plus, actually send them a trophy. We only do that for two brackets when somebody hits $100,000. And when somebody hits a million dollars in stocks, I always do that I always send them like an award.
It’s pretty sick a word By the way, maybe I’ll show you a picture of it. Somewhere here, the six figure club and then the seven figure club award. And that’s that’s like, that’s when you feel like you’re starting to make it in the stock market. When you start hitting six figures. Plus, that’s when you truly start feeling like Hey, man, I’m making it like I’m actually doing this man. I know that that was a big feeling.
For me, when I first saw my account, and it had six numbers. I was like, Okay, awesome stuff. So 812 stocks is kind of where you want to be when you have 100,000 or $500,000. Right? A half a million dollars to a million dollars 12 to 15 stocks, once again, depends on your risk appetite. This is my philosophy. This is my strategy. Okay.
And then if you’re over a million dollars, 15 to 20 stocks is about right, you got $2 million in the market, $5 million in the market, $8 million in market $10 million in market, we just had somebody that private group recently hit over $10 million. Now stocks is absolutely insane. So that’s, you know, I can definitely understand getting a place we got 17 stocks, 18 stocks, so you’ve probably been building it for a while.
And, you know, that’s a lot of money to have in the market. And you want to make sure you’re staying somewhat diversified. Okay, now, that’s portfolio diversification, talking about options and leverage, you’re going to hear things like this talked about in the market, okay. Now, none of this should pertain to people that are in the stock market, um, basically, you know, that are new to the stock market.
I’m only telling you guys this, just so you know, what these things are when you hear about these things, okay? Basically, options are essentially people placing bets that stocks are going to go up to certain prices by certain dates or down to certain prices by certain days, or it could be people basically, you know, writing different option contracts because they believe a stock’s going to not move much, it’s not gonna have much volatility, and they’re gonna be able to get premium from that.
There’s many different strategies around options. But a lot of times if you hear people you know, doing something in relation to options, what most people are doing the average retail investors, let’s call it that, okay? They’re usually buying call options or they’re buying put options Okay, buying a call option is essentially you’re betting that a stock price is going to go up to a certain price by a certain date.
And if you’re buying a put option, you believe a stocks gonna go down to a certain price by a certain date. Once again, you know, beginners in the stock market don’t really have any place near options. I’ll just leave it there. Okay, leveraged debt investing.
Also something beginners the stock market don’t have any place really messing around with but you’re going to hear about it a leveraging money, Hey, I got margin, things like that. Okay, as essentially you’re investing on debt. So you know, you can actually set up a margin account with like a brokerage and, you know, invest an extra dollar for every dollar you have in the market.
So you think and understand about leverage margin debt investing things like that it has risk, it has risk, okay? Because, yes, you could push up your gains real quick. Let’s say you have $10,000 in the market and then you take out another $10,000 margin loan to invest another 10,000. Okay. Okay, so now you have $20,000 in the market.
So if you’re doing great in the market, your gains are going to get way pushed up. Good for you. On the flip side,You get absolutely decimated. If the stock start going bad and your stocks start doing bad, you can actually be forced to sell your stocks or deposit more money in your accounts, your brokerage can call that money.
And they have the right to do that whenever, okay. And that can lead you to a really ugly situation. So you definitely, you know, if you’re a beginner in the stock market, you really shouldn’t even be, you know, worrying about trying to make like, I’ve been in the market for like, 100 years, right? Well, not 100 years, but I’ve been in the market for a while, I rarely do option moves.
Rarely, I rarely do anything margin related, very rare, okay, this is the type of stuff is it’s going to take you to higher risk levels. And you got to really be careful of that when especially when you’re newer to the stock market, okay, even if you’re experienced, especially when you’re a beginner in the stock market, right. Alright, guys, so let’s talk about some examples of some beginner stocks out there.
So good beginner stocks are usually big tech, okay, companies, like, you know, Apple, Google, Facebook, you know, Amazon, Microsoft, those sorts of companies are usually, you know, the ones I think about first and foremost, because everybody pretty much knows those companies, like, you know, you don’t even have to have a super high level understanding of any of those companies,
I just list off, you have a good thing, you know, you know, probably a high probability 95% plus of people that are watching this video, you know, each one of those companies I just listed off to you right there, and you have somewhat of an understanding of like how their business works before you even start, like doing the research work, right.
So those are usually kind of the best stocks, I think about to start with, for beginners, okay, you kind of pick one or two of your favorite ones and invest in those, okay, then I think it’s smart to find one growth stock, as a beginner in the market, one growth stock, invest in it, okay, one in and outside of the big tech, let’s put it that way outside of big tech, one growth stock that you really like, find one value stock you really like, and maybe find one dividend stock.
If you’ve got a smaller amount of money in the market, just worry about one of these, essentially. So maybe you buy two of the big tex one grow stock that’s not in the big tech and one value stock or something like that.
And the reason you want to do that is you want to get some experience in adding some stocks that are outside of like the big tech companies or something like that. And those that that’s kind of like the perfect strategy. In my personal opinion, if you’re getting your brand new the stock market and you’re trying to you know, get your feet wet, and those sorts of things because you don’t want to move, you know, too fast.
If you move too fast, you can get hurt pretty bad. Okay, we’ve had two really good years in the market. 2020 was a great year for the NASDAQ. We had a great year in 2019 for the NASDAQ, you know, 2021 we don’t know how it’s gonna be for the NASDAQ. Okay, and so you don’t want to take you know, too, too crazy a risk out there.
Make sure you’re staying disciplined. All right now value in growth stocks. So I put out an hour long video that goes super in depth on this, I’ll probably show you the thumbnail here. Something like that got called it like how I find my next million dollar stock high growth investing tutorial or something like that. I called it put out that video a few months ago, you know, like I’m showing you there. watch that video if you want to learn a lot more about growth, investing in growth stocks, because that video goes super in depth on it.
Okay? to kind of just tell you a little bit here, okay. Tam is a total addressable market, extremely important when looking at a growth stock. You want to know what their true opportunity is, this company is going after, okay.
Now, what percentage of that total addressable market? Does this company have a decent probability of getting this is extremely important. So if they’re going after a Tam of $100 billion, what is the probability that this company will get a 5% chunk of that? So $5 billion, or 10%? So $10 billion, something like that. Very, very important.
Now, how do you understand that the research work, we went over in the moderate section, exactly all that research, work, and experience, the research work and the experience, you’ve been in the market doing business for a while, you’re going to be able to judge these sorts of things a lot better, okay, what my most successful investment ever in my life was Tesla stock.
I started buying, you know, a couple years ago. And when I looked at that stock, I said, Okay, all vehicles in the future, in my opinion, 10 years or so will be electric vehicles. And if that’s true, whether it’s close to being true, then what’s the chances Tesla’s going to grab this percentage of market share, and I was able to start doing with doing numbers, and I realized, Oh, my gosh, this company’s significantly undervalued, and ended up being my best stock I’ve ever had in the stock market in terms of stock market gains, like made like, I think 1,500% or something like that, in a matter of like, a couple years.
It’s been amazing. And so I only got to that place from experience in the fact that I did ridiculous amounts of research into that company. I looked at the probabilities, I looked at what they were doing and things like that. Okay. So that’s really important.
You want to look at the current market capitalization for a company, you want to look at that current market cap, extremely important. You know why? Because then you’re going to try to look at what the five year out net income will be for that company. And these aren’t like numbers that are just out there that you just like, oh, let me look at what five year our net income is for this company.
You have to do those numbers. And the only way you can do those numbers and formulate those numbers, is by doing ridiculous amounts of research work into that company.
But I can tell you when it comes to growth stocks, if you do the research work right, and you pick the right stock, the gains are so worth the work.
Okay, I’ve seen it time and time again. I’ve seen it with stocks like Tessa. I’ve seen it with stocks like Netflix stocks, like Amazon stocks, like Apple stocks, like Shopify stocks, like AMD stocks, like Nvidia, company after company.
I’ve seen it with where people that actually put in the real world research work, whether it was me or whether it was somebody else out there, they put in the real research work and they made more money from those stocks than they ever could have dreamed of. Okay, so believe me the research work is worth it.
I hope you guys enjoyed this video as always, this was the stock market for beginners video 2021 if you haven’t already hit that thumbs up button if you don’t mind please that’s all I ask in return for this video. This was a ridiculous amount of value I gave out in this video.
And also if you want to join stock club might have that as like the pin comment down there. It’s absolutely free to join in there you can talk stocks with you know literally you know 10s of 1000s of members from all over the world and there if you want to try to apply from my private stock group and you know basically get in there you can also you know apply for that that will be as a maybe like the second pin comment down there if you want to put in an application to try to join in there. Thank you for watching and have a great day.