Sauls investing discussions? I first heard of Saul Rosenthal through my Motley Fool Stock Advisor subscription. Many people started asking whether this or that stock was “Saul stock,” and I thought, “Who’s this Saul guy?”
And then I realized that Saul had his discussion board on the Motley Fool – Sauls Investment Discussions . I quickly realized that we had a lot in common: We both enjoy investing, have excellent success beating the market, and adhere to the common good.
I began exchanging emails with him and asked him if we could discuss some of his investing principles more deeply. We’ll have a great chat if you are an investor (or looking to become one).
Saul, How did you get started? What brought you to invest?
My education is in medicine. However, I was tempted to go into math. I’d been investing on a sporadic basis for a long time, but I became serious in 1989, as we had our first child, and I was looking to retire in 7 years (I have done so). My wife became agitated (“You don’t even think about retirement in 7 years! We’re expecting our first child !”), and I decided to start investing seriously.
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It’s important to be aware that my wife, family, and I have been living off the money I make from the market since I decided to retire in 1996. That’s 20 years! I don’t have a pension or any other source of income other than Social Security.
Many times, people feel terrified and overwhelmed when they first start investing. How can they approach investing?
There aren’t many people who are suited to invest. It is important to be enthusiastic about playing games, recognizes that you will not be able to win every time, and isn’t fearful of numbers. I believe you should take it as if you are learning a new skill starting with a modest investment and when you’re beginning, try to master all that you can about the markets and investing.
My public board at Motley Fool, Saul’s Investment Discussions is a great source; however, there are many other sources. If investing is a pleasure for you, you’ll likely be successful. If it’s a chore that isn’t enjoyable, it’s best to invest your money in various index funds.
What’s a great stock for newbies?
This is a question I’m unable to answer. Every stock is unique, and no stock will ever be “typical.” Probably the best place to begin is to consider a few companies whose products you are fond of and use: Amazon, Apple, Facebook, Nike, Google, or any other you decide to choose.
What advice would you offer to someone looking to invest but doesn’t want to devote a lot of time to it?
You can invest in index funds or ETFs that monitor the market. When investing in individual stocks, you must be enthusiastic about doing it. Also, it would help if you enjoyed being able to devote an hour or two doing it.
From 1989 to 2007, you had an average of 32% returns compared to the market’s 12percent. What kind of mindset and behavior are essential to outperform the market?
You will likely start don’t worry about what the market is performing. Rather, focus on what your portfolio is performing. The goal should be to earn funds to ensure that you and your family members have financial security and enjoy what they want in their lives.
It’s also essential to look at information sources as mere sources of information and as not an actual Holy Grail. When all the talk shows are shouting “Sell! Sell! Sell!” it almost always is the lowest point price of the market.
In general, the market fluctuates; however, over time, it has always been going up (at least in the last 100 years or more). Anyone who claims “that this time is different” and that stocks will never go down for eternity should take it with a huge amount of suspicion.
What number of stocks should an investor have to ensure proper diversification?
It’s impossible to keep on top of more than 20 or more stocks, which is the absolute limit. I prefer a lower number of stocks as they are simpler to track. When I was first beginning my journey into investing in my portfolio, when the in terms of dollars was smaller, I achieved better results in percentages due to my ability to concentrate on 5-10 of my favorite places.
Reading the quarterly reports and transcripts for all quarterly conference calls is essential. This can give you an abundance of income season. The company usually says much more in conference calls than in an earnings announcement.
The transcripts are more efficient than listening to the recordings since it only takes a quarter of the time. You also can skip forward-looking messages, etc. Take a look at investor presentations as well. Also, get news feeds from your broker about the stocks you hold.
What are the biggest mistakes that investors make?
The biggest mistake you can make is not being willing to admit to being wrong. Sometimes, changing your mind in the face of fresh evidence and even selling when it is necessary is the most crucial action you can take.
I believe that being able to alter my mind when confronted with new evidence is among the most valuable skills I possess. Learning that it’s acceptable to change your mind at appropriate times is among the most important skills I attempt in my discussion board.
I can say that I occasionally make mistakes in entering or out of an organization, but I’m prepared to reconsider my decision when I realize that I was mistaken. It’s crucial. I’ve come across many who become upset (instead of considering a different opinion) whenever they suggest that their favorite stock isn’t the best option.
Another big mistake is anchoring prices: “I want to buy this stock, but it’s at $25, and it was at $21 three months ago, so I’ll wait until it gets back down there before I buy,” or “I know that I should sell this stock but I bought at $34 and I want to wait until I can get back to $34 before I sell.” The stock doesn’t have any memory. It’s priced at the level it is at. The question is, what would you like to do now?
What tools and resources for investing would you suggest?
I am a huge fan of I value Motley Fool. They aren’t always right. Not even close! However, at the very least, the stocks they recommend must include a thorough explanation of why they are suggesting them and an online discussion forum follows the company. This is extremely important. There are many other places where you receive an investment recommendation, only the company’s name with any discussion or follow-up.
If you could offer yourself a piece of investment advice, What would you recommend?
Get serious about investing right now. Even if you only put aside an amount of money each year, if your investment is successful, the decades of compounding increase.
Lastly, is there anything I didn’t ask you about that your readers would like to be aware of?
Don’t believe everything I’ve told you. Learn more about the truth for yourself.
I first heard of Saul Rosenthal through my Motley Fool Stock Advisor subscription. Saul And then I discovered that Saul had his discussion board on the Motley Fool – Saul’s Investment Discussions. When investing in individual stocks, you must be enthusiastic about doing it. Amazon, Apple, Facebook, Nike, Google, or any other you choose to choose. It’s impossible to keep on top of more than 20 or more stocks, which is the absolute limit. Reading the quarterly reports and transcripts for all quarterly conference calls is essential.
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The company usually says much more in conference calls than in an earnings announcement. Sometimes, changing your mind in the face of fresh evidence and even selling when it is necessary is the most crucial action you can take.
Another big mistake is anchoring prices: “I really want to buy this stock, but it’s at $25, and it was at $21 three months ago, so I’ll wait until it gets back down there before I buy,” or “I know that I should sell this stock but I bought at $34 and I want to wait until I can get back to $34 before I sell”.
The stock doesn’t have any memory. It’s priced at the level it is at. Get serious about investing right now.
Source Chris Reining Haneef Fact Diary