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Picking Wealth Creating Stocks without Experience
Does the fear of picking the wrong stock keep you from moving forward?
If you are ready to get involved with the stock market, but your fear of information overload is keeping you on the sidelines then today and next week’s newsletters will be the remedy you have been seeking.
Today’s newsletter goal is to:
Show you actually how I choose what stocks I want to own for the long haul.
At the end I will go over what I expect in the market this coming week.
Buying stocks should be simple but the professionals we listen to for advise make it seem complicated. Many times it is because they do not want you to know the system.
The system for most of them is throwing mud on the wall and see what sticks or blindly throwing darts to pick which stock they want to buy next.
My favorite is when people tell me they have some omni intelligent ai software that does all the choosing for them.
My system is very simple and I will give it all to you right here, right now.
I follow the Buffett logic for owning a company. Which means the company must sell a product that is different and that difference is created by a competitive advantage over the rest of the market.
Think branding like Pepsi or a massive distribution system that cannot be outdone such as Walmart for years before Amazon and now AMZN will rule. Funny enough look at the price of WMT in 2016 til today. I’d be happy with that run up wouldn’t you?
Where do I come up with this list of companies that have a competitve advantage. I go to the experts!
Start by googling top funds by performance for 2024
Then you compare the top ten holdings of these funds by opening them in seperate windows.
Find the similiar symbols because these funds would love to own the whole fund in these ten stocks, but they cannot due to regulations, however, you can.
OH YEAH! No limit for us retail investors. We can buy all of these companies common stock if we want!
Just in these 3 funds you notice a few symbols that are the same.
STEP #2 Chart Study
Figure out which symbols have a growing upside trend and then do research based on your money to see which stocks you can start buying to maximize your investment.
When I purchase a stock I try to only buy if I know that I can pick up a minimum of 100 shares during the purchase year or I move on to another company.
Perhaps there is a smaller ship in the same sector that is less expensive but will rise with the tide of the bigger ship. Especilly if the 2 are linked. Think Microsoft machines and Nvidia graphics cards.
I also only want a stock if it is global and optionable.
The options is so I can protect my downside when the stock is falling hard for months by buying puts to offset the losses.
The better you get at this and the more money you make then the more time you will have to become more choosy about what you buy and develop your own system.
But this is the simple system I was taught by a very wealthly stock market operator and it works just as well today as it did back in the 1990s.
In fact it works better because now this information is free to obtain and this reaserach can be completed in a sunday afternoon.
Now as far as the market is concerned the down we are experiencing is not over in my opinion.
We are likely to see a little sideways profit taking then a push back down as the candles feel the pressure from the now declining moving average lines.
We are entering the end of earnings season and as we go into August we should expect a more downside bias.
My hitlist for this week looks like this:
NVDA
CMI
DE
LRCX
$RUT
$NDX
$SPX
I am not currently in any trades and next time I write I will talk about how I choose symbols to trade. Becasue there is a difference between stocks I own and stocks I trade in order to compound my money to buy more stock in the companies I own.
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