Why I'm Qualified

One of the worst mistakes you can make in this game, is assuming that someone's credentials, makes them good at suggesting what direction a stock will trade.  It's normal to assume, that someone with a great education, full knowledge of a certain sector, someone that converses with different CEO's, that they understand the business the best.

The problem is, then taking that knowledge, and balancing it against, where the stock is currently trading, what's it value is, what it's earnings in future will be, and what the current market sentiment is.  This is where the connection breaks down horribly.  It's not enough to understand a business inside-out, you need to know how to apply that knowledge.

You know what qualifies a great stock picker?  Simply results.  Results in this game are always money.  If a Goldman Sachs (GS) money manager with a billion dollars to invest, was able to return 12%, and that same year, you returned 15%, on your $5000 portfolio, you are the better trader that year.  If you did that consistently over a bunch of years, I would have no problem saying that you are a better trader than one of guys at Goldman Sachs.  You are, and there's no arguing this.

Results are simply gained by being intelligent, knowing what to look for, knowing what information to discredit, and having a contrary opinion.  Investing requires you to hold a contrary opinion to be profitable.  In general, who ever is selling a stock, thinks it'll probably go lower, and anyone buying it, believes it to be going higher.  It's that difference of opinion that makes the market.

Results are what I have to offer you.  My full three years of investing, I have never lost money, in fact, each of those years I returned an average of 47%.  If you could return 47% over a ten year period, they would consider you a God on Wallstreet.  Over long periods of time, like 15-20 years, 25-30% is considered godlike in this game.

Unfortunately, I can't return 47% for you each year.  Those numbers are skewed by a particularly large 2009, my first year, I grew my portfolio by 162%.  That means if I invested $100,000,  I ended up being $262000 in my first year.  Those years are not typical.  2010 I returned 4%, and returned 2011 18.5%.

These would be considered great results by anyone who knows investing.  In this last year, I returned 18.5%, and I did it against a market that was flat for the year.  Flat meaning stocks did not go up or down.  Most people made nothing, or lost,  last year.  Many big money managers did to.  My strategy was actually safe through this time.  I can honestly say, I made 18.5%, got to speculate 20% of my portfolio, on small fun stocks, and still crushed the market, and most pros.

I've started this year also, and looked poised to out-perform.

What I do for a living, how old I am, what sex I am, those are things that have merit, but really, the only that matters in this game, is results.  If I sound like I'm making it out to be a big competition, that's because it is to me, and it should be to you too.  People have to choose sides, and opinions all the time in this game, and I love that.  You do have people that are right, and wrong, and there is a clear answer.  Competition breeds results, and will make you pay better attention.

They suggest X, I suggest Y, and when Y hits exactly as I knew it would, it makes me happy.  I liken it to a checkmate in chess.  The best part is you also win money.  The better part is your are literally out smarting people with PhD's, people who are in the pits of wall street, and the talking heads on TV, at least in terms of stocks direction, which ultimately determines price, which is the only thing that matters.

Why am I qualified?  More than my results, it's my way of thinking.  I've always been against the grain.  I see both sides to every argument, without bias.  I'm willing to listen to what the other guy is saying.  I'll learn from anyone.  I argue my points with passion, and I'm never scared to make a prediction, and stand by it, right or wrong.  It's this kind of thinking, that will be the most valuable thing you take from this course.

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It's almost time to get started, but first I have to admit "I Don't Know Everything"...