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Bad Stock Investments
In the late 1980’s Japan seemed set to take
over the world.

http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
The Japanese stock market was the envy of
the world and the Nikkei stock index was
around 39,000.

http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
Today it is less than 10,000.

http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
One of the bad stock investments of our
time would have been to buy a basket of
Japanese stocks twenty-four years ago and
hold them.

http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
There are several types of bad stock
investments.

http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
Holding dividend stocks that do not keep up
with inflation, falls in the bad stock
investments category.

http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
Holding on to a stock that has run its course
in search of just a little more profit also falls
in the bad stocks investments category.

http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
Here we look at
tactics, strategy, fundamental analysis, and
the efficient market to consider good and
bad stock investments.

http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
What Goes around
Comes Around

http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
This old proverb tells us that what we do one
day eventually comes back, often times to
haunt us.

http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
We too often become victims of our own
thoughtlessness.

http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
The major psychological drivers in the
market are fear and greed.

http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
The twin demons lead to more bad stock
investments than all other reasons.

http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
The best way to avoid falling prey to these
bugaboos is to study what you want to
invest in.

http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
Proceed by degrees. Diversify your
investments in such a way as to avoid
putting all of our investment capital where
one set of factors could bankrupt you.

http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
Take the long view of the stock market.

http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
Consider the long view when investing in
gold.

http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
Gold has rallied twice in the last forty years
and fallen back twice.

http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
Consider practical approaches to investing
such as investing in beer.

http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
People will always want a drink when the
market rallies and when it falls.

http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
The time honored beverage has a wide
following and is a worldwide source of profit.

http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
Think of what makes money in a rising
market and what makes money in a
recession.

http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
Do your homework and do not just rely on
tips.

http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
Self-Defeating
Strategy

http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
In the late years of the 20th century Microsoft
bailed out Apple Computer. Apple went on to
invent hand held devices that have hurt the
Microsoft PC business.

http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
This was a deal of money for patents
instead of money for stock but it still falls in
the bad stock investments category.

http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
Microsoft or Mr. Gates privately, should have
required stock options in return for their
bailout money.

http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
Then they would have prospered on the rise
of Apple to the corporation with the highest
capitalization in the world.

http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
Instead Microsoft was concerned about
antitrust activities of the US government and
set its competitor on the path to dismantling
the Microsoft Empire.

http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
The Efficient Market

http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
It is a true story that a bunch of stock market
reporters threw darts at the stock pages one
day and tracked the stocks that the darts hit.

http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
Their randomly selected stocks
outperformed the market.

http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
In the book A Random Walk Down Wall
Street the authors noted that in the 1960’s
and 70’s one could reasonably expect to buy
ten large cap stocks and market 12% per
year per year.

http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
With forty small cap stocks one could expect
to make 18% a year.

http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
When you are buying and selling stocks look
at how the market prices things and avoid
bad stock investments.

http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments

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Bad Stock Investments

  • 2. In the late 1980’s Japan seemed set to take over the world. http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
  • 3. The Japanese stock market was the envy of the world and the Nikkei stock index was around 39,000. http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
  • 4. Today it is less than 10,000. http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
  • 5. One of the bad stock investments of our time would have been to buy a basket of Japanese stocks twenty-four years ago and hold them. http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
  • 6. There are several types of bad stock investments. http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
  • 7. Holding dividend stocks that do not keep up with inflation, falls in the bad stock investments category. http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
  • 8. Holding on to a stock that has run its course in search of just a little more profit also falls in the bad stocks investments category. http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
  • 9. Here we look at tactics, strategy, fundamental analysis, and the efficient market to consider good and bad stock investments. http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
  • 10. What Goes around Comes Around http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
  • 11. This old proverb tells us that what we do one day eventually comes back, often times to haunt us. http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
  • 12. We too often become victims of our own thoughtlessness. http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
  • 13. The major psychological drivers in the market are fear and greed. http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
  • 14. The twin demons lead to more bad stock investments than all other reasons. http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
  • 15. The best way to avoid falling prey to these bugaboos is to study what you want to invest in. http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
  • 16. Proceed by degrees. Diversify your investments in such a way as to avoid putting all of our investment capital where one set of factors could bankrupt you. http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
  • 17. Take the long view of the stock market. http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
  • 18. Consider the long view when investing in gold. http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
  • 19. Gold has rallied twice in the last forty years and fallen back twice. http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
  • 20. Consider practical approaches to investing such as investing in beer. http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
  • 21. People will always want a drink when the market rallies and when it falls. http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
  • 22. The time honored beverage has a wide following and is a worldwide source of profit. http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
  • 23. Think of what makes money in a rising market and what makes money in a recession. http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
  • 24. Do your homework and do not just rely on tips. http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
  • 26. In the late years of the 20th century Microsoft bailed out Apple Computer. Apple went on to invent hand held devices that have hurt the Microsoft PC business. http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
  • 27. This was a deal of money for patents instead of money for stock but it still falls in the bad stock investments category. http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
  • 28. Microsoft or Mr. Gates privately, should have required stock options in return for their bailout money. http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
  • 29. Then they would have prospered on the rise of Apple to the corporation with the highest capitalization in the world. http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
  • 30. Instead Microsoft was concerned about antitrust activities of the US government and set its competitor on the path to dismantling the Microsoft Empire. http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
  • 32. It is a true story that a bunch of stock market reporters threw darts at the stock pages one day and tracked the stocks that the darts hit. http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
  • 33. Their randomly selected stocks outperformed the market. http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
  • 34. In the book A Random Walk Down Wall Street the authors noted that in the 1960’s and 70’s one could reasonably expect to buy ten large cap stocks and market 12% per year per year. http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
  • 35. With forty small cap stocks one could expect to make 18% a year. http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments
  • 36. When you are buying and selling stocks look at how the market prices things and avoid bad stock investments. http://www.profitableinvestingtips.com/stockinvesting-tips/bad-stock-investments