Daddy I Want to Invest Like You!

I have wanted to write the perfect post on investing for beginners from day one of this blog. It would be so good that experts alike would point to it. I would be flown around the world and only release my thoughts to people that ‘walked across coals’ and paid $100,000 for a weekend.

My daughter Rachel and son Max should know how to invest. They have asked me and it should be music to my ears. I should be able to teach them the basics in one blog post.

But, if my daughter invested like me, should would hate herself, she would have shorted stocks based on valuation, talked to idiot stockbrokers, yelled at CNBC for 5 years, read The Wall Street Journal every morning for ‘expert analysis’ etc… and maybe she needs too?

Every investor has their first moment. I hope they have that first moment. When they do, they ask someone for help…an intro, favorite idea etc…

That’s when things go out of control. What are the odds that first bit of advice will be anywhere close to good and set off a chain of great habits?

Most people want to buy a stock because they have heard of the company and believe in a catalyst, that catalyst being the way they interact with or use and love that same product. The exact right reason!

If you are in high school and lucky enough to have a class about investing, the parameters are usually to pick 5 stocks that will go up the most in 4 weeks. I have been coaching my nephew as best I can but when winning means picking stocks that will go up the most over 4 weeks, you can preach, but you can’t teach.

Like the name of this blog I started 6 years ago, not much has changed. I have boiled down a life of investing into three things…’Find big trends, RIDE them, and Get Off!

I like my ideas in the stock market to come to me. I write about that in the first chapter of The Stocktwits Edge ($ARBA, $INTU and $RAX) and luckily they are all now big winners and $ARBA has been acquired (I am still long $INTU). A random idea I see in the news or on my streams, or walking past a product that makes me look up the ticker, a quick check of the price, the company background and industry strength and than my decision.

If I were to do another show about investing or trading, it would look and feel much Like ‘Curb Your Enthusiasm’…an investing and trading show about nothing.

Once you know the language of the market and can apply my basic theories, you can just go on living your life. You need a few tools of the trade, but trust me that is it! As you learn the language of the market, my basic theories and strategy may not work best for you, but do not despair, there are tens of thousands of people on Stocktwits and the rest of the web practicing their trade for you to glean from.

To get started on the language of the market, spend twenty minutes a day on Stocktwits and immerse yourself in the market speak. Over the course of 6 months you will know more about the language and sentiment of the market than 99 percent of the other market participants. First problem solved.

To recap:

1. Learn the language

2. Find a consistent method of getting ideas

3. Ride these ideas

4. Get off.

Over the next month of what are calling ‘Stocktober’ leading up to Stocktoberfest, I and many others on our blog network will be diving into the lessons and passions and methods of investing.

In that spirit, I love this post from Brian Lund entitled ‘9 Reasons Why (Yes Even You) Should Learn to Trade‘.

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