Link to join StockHub free investing discord server: –~–
Good day subscribers thank you so much for joining me today i am jeremy this is the financial education channel and today we’re talking about why i invest the way i do why is my investing process the one i choose why do i think this is the best type of investing process i’m going to kind of give you guys my whole argument today on why i believe my investing process
Is the absolute best out there without question and why a hundred percent believe in it now with that being said just because i feel my process is the best way of doing it didn’t necessarily mean i think others that are doing a different way is that i’m all for it like if you want to be a day trader fine if you want to be a short-term trader a swing trader if
You want to be a super long-term investor like i’m all cool with that i think it’s just badass that people actually give a enough to like make their money into money at the end of the day like making like first off – even in deaths right you’ve got to have money you got to have you got to be doing well enough personal finance wise to even have enough money to
Then go ahead and invest so i think the fact that you’re at that point that’s phenomenal and i think the fact that you’re trying to make that money into money is great and even if you pick a strategy that you fail let’s say well sooner or later you figure it out they that way doesn’t work when we try this way and in this way it works and you do good from there on
It so even though i feel like my way is the best way i anybody that has any type of investing style a real estate as commodities gold whatever i’m like that’s cool like i’m fine with that you know what i mean not everybody has – my style and thank goodness not everybody does my style because if everybody did do my style then every company ever want to invest in
Would have ridiculous valuation so you know it’s good that everybody’s got their different way of doing things but so usually i prepare like you know my ipad here and i have like point laid out so i can kind of keep on track i didn’t want to do that for this video i just wanted to be one of those videos that’s like if somebody just asked me like why do you invest
The way you do so my way is called modern long-term investing it’s a term that i literally created it’s you know i call it even on the book modern long term stock market investing no one’s ever coined that term it’s something i completely made up out of thin air it’s an investing style that has definitely some graham warren buffett type principles in it but it
Definitely has so many people in it definitely has my own little flair into it so what i’m kind of looking at as far as what i look for in a company and for how far out looking so i’m looking for the neck i’m looking for a minimum of one year out to more like three four or five years out what do i see what can i foresee with that company so one is sometimes some
People will say an argument for me is like sometimes people say jeremy why you look three four or five years out two years out even how do you know what’s going to happen in the future and the truth is you never know a hundred percent sure what’s going to happen in the future but part of the best part of investing like it don’t matter what investment you pick out
There you don’t know what could come up so it doesn’t matter what level you’re investing at there’s not one stock out there that you can definitely tell me a hundred percent that this stock will be doing this well you know five years from now ten years from now there’s not even one stock being an investor is a lot of being in a businessman at the end of the day you
Make business decisions based upon where you see a management decision-making going over the long term and one of the important things to here is what management is looking for over a long term and then making a business decision to then invest in that company so that’s kind of the way i’m viewing things and the reason i kind of look for that you know three four
Or five years out is because that’s what i can realistically see i can’t see past five years like people ask me you know you know five 10 years from now what’s what’s this company going to be doing i don’t know it’s too far out it’s too far out nowadays and that’s kind of what differs me from the warren buffett type and graham type investing philosophy which is
Buy and hold forever because things change too fast nowadays where we’re so advanced nowadays there’s you know 2017 things change so fast that you can’t realistically see ten years out ten years from now will walmart be making the money they’re making now i don’t think so like i would highly doubt it but who knows maybe there will be maybe they’ll you know take
A packages really seriously you know and delivery and the internet and all this stuff and maybe also no mock up amazon but right now i would say heck no so i can’t see out that far i can see out three four or five years i can see the vision and if i don’t see the vision with that company over the next three four or five years then i don’t invest in it it’s got to
Be a company that at least one year out plus i’m seeing good things with them developments and those kinds of things guys so that’s kind of that my thing and what do i do i look for a company it’s got a great balance sheet now why do i care about about sheet well because i’m planning on investing that stock for the next few years doesn’t always mean all in that
I’ll be in that stock for the next few years sometimes say it goes up a time maybe i’m just like got a better place for my money i might sell out it doesn’t just because i i stock it doesn’t mean i’m going to add to and hold it one year to five years from now it really does it it really doesn’t sometimes there’s been tons of stocks that i put money into a little
Bit or a lot and it just suddenly spikes a ton and then i just sell out take my profit because there’s something better else i can go into wow balance sheet why do i love a good balance sheet specifically cash heavy and investment heavy low in debt well because i’ve been planning on being in that stock for the next few years let’s say a rough situation happens with
That company a lot of mistakes i’m going to be able to sleep well at night if that company has a poor balance sheet guys i’m not you say well yeah you can just sell it off at that point well yeah you’re probably going to be down massive amounts of money already at that point so my thing is if i’m holding the stocks in the next three four or five years i want to stock
That is going to let me sleep well at night even if management screws up a great a great one since i mean there’s been tons of stock since i’ve started that you know it may tends to have a great balance sheet company but one in particular was gopro right gopro one of the things i saw in gopro was a phenomenal balance sheet and so i said okay if this company screws
Up if something goes wrong then they can get through it and they won’t go bankrupt well guess what happened gopro i don’t want to say that for gopro screwed up so many things right and they went so unprofitable because they messed up they have a you know it’s just like you know said the story a million times they had so many squirrels well thank goodness there’s
Still a company there because if they had about that bad balance sheet i invested in that stock and then they made those mistakes they would be probably bankrupt right now they would probably be out of business the great balance sheet has gotten them through this this whole situation and then hopefully you know the job cuts and all those kinds of things but that
Is why balance sheet is key because guess what someday you’re going to pick a stock you’re going to pick a something or company that things are going to go wrong and that’s happened to me with that stock in particular and it’s not always talking my career that’s happened it’s been other stocks but some point something like that’s going to happen and you’re either
Going to lose all your money or you can on you know bounce back and those kinds of things guys so that’s big and when i’m looking at a company i need to see the vision for the products or services that company sells over the next few years i’m looking at those i’m looking and i’m saying is that product or service going to expand decelerate or keep about the same
And these are just these are not quantifiable take things right it’s really me judging as a businessman what what the vision is there so you know it’s not like you can say you know there’s a sub metric you can do some financial metric there’s not some financial metric that can tell me iphones going to be selling just as many units or more units three years from now
There’s not but me making it as a businessman i say i see apple there and i say in my opinion apple three years from now apple will be selling just as many iphones if not more in three years from now than they are this year right so that’s me as a business man making a business decision it’s not like some quantifiable type you know let’s run a metric let’s run a
Number type thing so i got a c vision for the products got to see a vision for services i got to see that there’s going to be some type of expansion i go like management teams that get content i don’t like management teams that just get content and they just don’t want to explore something new because guess what if you have a major competitor that comes in your
Space where your get the majority of revenue from the majority or you know revenue and profits from you have a major competitor come in there and they take some market share from you and you don’t have something else brewing guess what’s going to have and your earnings are gonna go down your revenue is going to go down and what’s going to probably follow your
Stock price is going to follow which in my investing philosophy what do i do when a stock goes down when i invest in a stock there’s a 50/50 chance that from my initial investment that stocks going to go down or up in the short-term 50/50 chance now if it’s a bull market as a better chance will go up as it’s a bear market better chance of a go down so what’s my
Philosophy on if a stock goes down well basically if for every let’s say 5% 3 to 5 percent it goes down i add more shares and it is not really like a specific amount it’s not like oh let me double my position let me add 50 percent more than 20 it just depends on a situation how much money i have a you know available do i want to go in and heavier into that stock
Things like that guys so i’m looking at i’m saying so this stockage is invest in i loved it at you know $50 where i just bought it now it just went down to 46 basically for no reason a fundamental company i still like it just as much well what the hell i’m going to buy it at $46 now i’m going to stick some more money in there because you know what if i believe in
It just as much and it went down then that’s just a better price for me to get in at that point right now if something changed with the company and also i don’t like the company then maybe i won’t buy and i’ll sell it but at the same time if i were the way i do research the way i researching the company like i’m a hundred percent sure on that company when i go
In doesn’t mean it’s going to go 100 percent up in the short term but over the long term i’m like a hundred percent confident that i’m making that right decision so the chance is that i would just investment company three six months later and then sell it down it’s almost a zero percent chance literally guys i can’t even think i can’t even think of a stock i’ve
Ever done that on literally nine years of investing i can’t think of a stock i’ve ever invested in it went down and then i sold it except for with only exception is 2015 a year i lost seventy five thousand dollars doing trades and whatnot you probably know that story you probably watch the video i have on it’s one of the most popular videos on the channel where i
Was trying to trade and all those kind of things and let’s talk about that real quick let’s talk about why i don’t trade let’s talk about why we already talked about why i’m not a super long-term investor like buffett because you can’t rail stickley see out that far in my opinion why am i not a trader or short-term trader well first off i tried to be a short-term
Trader i failed i felt i’ve lost $75,000 i don’t know how else to say it other than that i failed at being a short-term trader why don’t i be a day trader or try short-term trading again or something like that well basically i don’t see any vision for short-term trading first off what my investing strategy is what took me from zero to 200 k that’s what did it my my
Long modern long-term investing tragedy that’s what took me that number and you know what lost me $75,000 in 2015 need trying to trade so it doesn’t mean i can never try it again or i have no plans to ever try it again session ids around test but why you might have a day trade or something of that well day trading is an interesting thing first off i know no one
Ever and i know a lot of people have tried and you’ll know whenever in my personal life out of friends and family who’ve ever succeeded as a day trader over the long term i know some that you know start in they had some beginner’s luck and you know did well in and they lost massive amounts of money no no one ever that’s ever done that i every single person i’ve
Ever taught my investing philosophy over to them over the coming years they’ve all made money and i know zero people ever that have made money despite knowing a ton of people who have tried day trading i know no one ever who succeeded so doesn’t mean you can’t succeed maybe you can maybe you have the right philosophy of those kinds of things but i’m not going to
Try it because there’s no philosophy i’ve seen out there and i looked at a ton of them down i’m like that’s the one i should do that or something like that there’s nothing in my opinion it’s a lot like gambling what you have in the day trader community in whole as well you know and i don’t want to sound like i’m hating on the day trader community because i’m not
And once again that’s the way you want to be that’s the way you want to be i’m just looking at it from my point of view i’m sharing my point of view and if you can’t respect my point of view then that’s fine you can turn it up now in my opinion what you have in the day trader community you’ve got a lot of people who are trying to sell stuff and you see it here on
Youtube a lot of times you know take my thousand dollar course take this course in trying to sell a lifestyle and why they need to feel like they need to sell a lifestyle you notice a lot of these traders will try to say to sell a lifestyle and oh look i’m living in the towels oh look at my lamborghini oh look at my fur they’re like trying to show a lifestyle and
I feel like they’re trying to get a lot of week or mines in the day trading community a lot of people that just see that stuff and give real it’s a mic mmm let me get a lamborghini and it really doesn’t work out and what you have is a lot of people that are basically make their money not from day trading they make their money actually from selling their thousand
Dollar course they’re $100 course there are ten thousand dollar course and things like that that’s how they actually make their money and what you also have is you have a lot of professional day traders who act like their professional day traders and really they’re not but they can show a lavish lifestyle not because they made their money day trading but because
Rich because honestly they made their money some other kind of way and day traders and poker players sometimes are are a lot of like in this respect where you got a lot of poker player you know i live here in vegas right you have a lot of professional poker players that like like hide vienna’s identity all i’m a professional poker player look at my fancy cárdenas
And that and then you do a little more research in them you found out oh they actually made their money because they sold this tech company for fifteen million a couple of years ago and that’s how they got their money but their professional poker player their professional day trader really they inherited a bunch of money from their their parents their a trust
Fund baby and they have the golden spoon in their mouth and now they hide behind the identity of day trading or doing this or doing that and it’s like you know then you really look into things and it’s like they’re not me actually making money they’re not even good at poker they just think they’re good at poker and they try to you know put on this persona oh yeah
I’m a professional day trader i’m a professional poker player you see that a lot guys so i can’t get behind something that i’ve never seen anybody in my life ever succeed at and why would i go against the thing that built me is a thing that i’ve seen everybody else make money with so i like why would i do anything other than what i do guys now why do i care about
Trying to have companies that have lower type pe ratios well a pe ratio is basically a metric to see how highly valued the company is or lower value so i like a lower pe because that means the company is basically has enough net income to pay off to a shareholders in a shorter amount of time the higher the p the more overvalued technically the company is but of
Course if the company has phenomenal growth then i might look tax to pe a little bit so let’s say let’s say a company is growing revenues by 50% right now they’re growing net income by 60% a year right now but they have a 33 p/e well if i see that company being able to keep up that growth rate for the next 3 4 or 5 years or something close to that growth rate a 35
Te not that high because you do the math on what the net income is going to add up to and guess what that p/e ratio in three years from now that’s going to be super super super low unless that stock rises which the stock has to rise to give the valuation a realistic expectation why don’t i care about dividends why am i just cut on you know what why do i not care
About dividends when i was beginning on the stock market i absolutely cared about dividends one my first couple years i wouldn’t invest really in anything that didn’t pay dividends why they try to move away from dividends well dividend companies generally speaking the heat dividends mainly because they don’t have as much growth going for them so they don’t have
As much growth in my style is on looking a lot value to the value side the warren buffett type diagram i’m looking value right but i’m also run a company with growth i want a company with a lot of growth preferably no company has grown 15 20 30 % type revenue numbers net income numbers those kinds of things those are type of companies i really like and those type
Of companies generally don’t pay dividends because they’re using their money to reinvest back into the business because that’s their best way of hiring more employees so they can expand these products and services a company has paying dividends they’re basically saying we got too much money that we don’t even know what to do with so we’re just going to pay it back
Out to the shareholders and when they pay that money back out to shareholders then you as a you as a your the stock basically becomes less valuable because here’s a thing let’s say a company has a billion dollar valuation right but let’s say they pay out a hundred million dollars in the dividend that year well now their balance sheet has a hundred million dollars
Less in cash on that balance sheet and that money’s gone it’s gone to the shareholders already so now that balance sheet has a hundred million dollars left in that balance sheet right that can be used for that rainy day we talked about you’d be used for hiring more employees used for this or that so dividends are good if it’s a company that’s so built out that
The growth really is in there to justify the money or they just have so much freaking money coming through the door that they don’t know what to do with you know apple comes to mind google comes to mind facebook in two or three years comes to mind they’re going to have way too much money coming from the door they’re not going to know what to do it so they might as
Well start paying dividends so there’s definitely companies and it’s definitely find you the view type with just a dividend investor that’s just not my personal way of doing it however i’m 27 years old i got two businesses i have a different philosophy now when i’m 47 57 years old dividends will be more important to me because i’ll be looking for more safety and
A lot of times the dividend-paying companies are technically safer there you have big competitive moats around them there’s huge corporations it’s hard to knock some of these guys off in gals off so technically they’re a little more safer than some of the other guys that could be volatile and can go down 4050 percent or whatever so as i get older dividends become
More important and you know the growth the extreme growth that i’m looking for it’s not as important after that guy so i tried to explain kind of my investing philosophy i hope i did this is kind of like a sloppy video because i don’t have my ipad here and usually i have like points laid out i just wanted to just talk and you know kind of get my point across there
Whatever type of investing style you have you know cool i’m cool with it you know what i mean i just am happy that people actually care and give a to like invest that’s freaking awesome guys so anyways if you just came across this channel you may want to subscribe we talked personal finance on the channel we talked entrepreneurship i’m an actual business owner i
Give away so many business tips we talked the stock market more than anything thank you for watching guys and have a great day
Transcribed from video
Why my Investing style is the BEST! | Modern Long Term Investing By Financial Education