Listen up because in this video i'm going to teach you how not to be an idiot which is not a simple thing to do, not because you're special, not because you're a unique snowflake. It's because we as humans are programmed to be idiots. We are governed by our emotions, and that is what's leading to 99 of mistakes being done with people's portfolios. Now much like car accident most of these mistakes.

Most of these losses can be avoided and are caused by human error, our own and in this video i'm going to share with you some of my stupidity in the past that taught me how to avoid these mental and emotional mistakes. I don't want you to click. Nothing, i don't want you to smash, nothing, don't buy nothing. I don't know courses, no sponsorships, just listen up, because this is important and hopefully it will help some of you now.

The first thing i want to talk to you about is fomo fear of missing out chasing fomo is one of the worst things you can do as an investor. A good example is what's happening with palantir over the last few days. Now, i'm sure some of you were not listening to the hype around volunteer and stayed out, and now the stock price is rising. It's going ballistic every single day and you fear of missing out.

So a lot of people will jump on it today or maybe even tomorrow, because they don't want to miss out on the big hype and that's a huge mistake not saying that getting volunteer stock is a huge mistake. I'm just saying that getting it out of formal. That's a huge mistake: a smart man once told me if you're just buying stock out of the expectation that somebody will buy it from you at a higher price. That's not usually a good investment strategy and i completely agree by the way this wasn't told to me it's a very famous saying, and some of you may actually know who said it.

If you do comment below, i wonder how many of you will know this now. I do have one rule: if i really want to get a stock, i have a 24 hour cooldown. I can't get a stock until i wait 24 hours to let myself cool down think clearly and if i, you know, 24 hours passes and i still really want it. Then i can get it now if you're a day trader if you're a swing trader.

That kind of strategy won't work for you and that's. Why i'm saying that this video is completely irrelevant to swing traders and day trader? And if you one of them this video ain't for you, this video is intended for people who are into long-term investing, which means at least at least a year. I can even live with six months, but not less, and if you're operating in six months one year two year, five year periods that extra 24 hours mean jack. They mean nothing to you whatsoever, but they can't prevent you from making a horrible mistake out of impulsive purchasing.

Now impulsive purchasing is part of our daily lives. We all did it. I mean i bought this t-shirt. This was an impulsive purchase.

I mean some nostalgia. We have it every single day, but when you do it in the stock market, with the amounts of money that you have invested in the stock market, that's usually pretty painful, so give yourself 24 hours and by the way i have the same 24-hour rule on exit. If i want to sell a stock, i always wait 24 hours and if i still want to sell it, then i'm going to sell it. I never do anything within the first 24 hours of wanting to do it.

This cooldown period is gon na save your life. It's like counting to ten when you really get pissed off same thing. It really works, trust me, but then again, as you know, i'm not a financial advisor, i'm just a youtuber with this system. The system worked for me, i'm sharing it with you.

You work out your own system, it's okay to get inspired by me. You got ta, find something that works for you with your needs with your emotion, with your personality. Moving on now. The second strategy is not being a dumbass, now not being a dumbass is kind of general.

But what am i talking about? It's not improvising. You got to walk into this with a plan with a clear strategy, exactly what you want to do. What you want to achieve you can't waltz into this portfolio, basically saying well, i'm gon na do whatever you got. Ta have a plan.

That plan starts with answering three simple questions. First of all, what is my financial position? How much money do i have to spend on this? Because this is an expenditure? I know a lot of people tell you. This is investment, but if this is your last money, you need to pay bills to pay rent if it's not extra money, this shouldn't be in the stock market. That's just my opinion, but i feel very strongly about that.

Less money, by definition, shouldn't be playing around in the stock market because there's a great risk by putting money in stocks and bonds and etfs everything has risk. Ask the people in the 90s that thought that enron would never go down or the titanic or world com or wild card plenty of big ass companies went belly up completely overnight, there's always risk. So the first thing is how much extra money do i have to play around with now? The second question is how much time you got if you're, 60 and you're trying to work on your retirement plan, you probably have five to seven years before you have to pull the money out pretty much. Let's say a decade, however, if you're an 18 year old, 20 year old, 25 year old, that means you have good 35 40 years to play with the money.

Now here's the other thing you have to understand. One simple question is: what's your risk tolerance, i mean how much guts or balls or whatever you want to call it. You have for risk because that will determine the type of investments you're going gon na take cinderella in case you haven't read. The book is basically a story when one girl had the perfect foot that was supposed to fit the perfect shoe, and once that happens, you know they live happily ever after the perfect story, the perfect ending, but in the stock market.

That story has to happen. For you to have a shot at basically weathering the storm, because there's always a storm coming in the stock market, just ask the people who basically been around for a couple of decades. There's always going to be bad volatile times and if you don't have the cinderella story with your stocks, you're pretty much screwed you're going to get jittery you're going to get angry and see and you're going to make mistakes because let's say you need money right now. For rent or food, so do you really want to sell out of a stock out of rent needs? Probably not or let's say you don't have 15 years to wait and you bought a biotech stock long term.

What's the point or let's say you: don't have volatility tolerance and you don't like risk and you bought something in, let's say again: biotech which goes up and down or cryptocurrency. You should match completely with your portfolio with the stocks that fit your profile, because you got to be stoic. You got to be completely calm and collected when the storm hits you otherwise you're going to sell off out of panic and you're going to miss out on this whole journey. It's called long-term investing and that's why i do encourage you to find your own answer to these three questions, because these three questions how much time you want, how much tolerance risk you have how much extra money you have will determine your success in the stock market Way more than any due diligence or any youtube, video trust me.

And now, let's move on to the next mistake, which is actually very common, which i call gambler's mentality. If you have a gambler's mentality, you're going to lose in the stock market, and it's not necessarily what you think it is when i say gambler's mentality, i don't mean swing trader or day trading. I mean a whole different thing when you walk into a casino, statistically mathematically, you know one thing the longer you stay, the more probability you have of losing money. Every single game is skewed towards the house, whether it's by one percent one and a half percent - half a percent but the longer you stay the odds even out and you lose.

If you apply that kind of thought process to the stock market as a value. Long-Term investor - you pretty much finished your own game, that's it! You can't do it because it goes against everything that is long-term value. Investing because long-term value investing is like marriage. Once you've found the one it's a keeper, you don't keep dating once you know the woman.

You want to marry with same thing with long-term value, investing the longer you stay in the market as long as the fundamentals of the stock are good, the more probability you have of the stock going up, which is exactly inverse of how casino mentality works. That's why you have to be very patient and allow yourself the time to let the stock catch up with its fundamentals. Much like palantir is doing right now, for example, but there's other examples just be patient now. The next mistake is being a garbage.

Collector you'd be surprised how many people get confused between buying the dip and being a garbage collector. If you have a high conviction stock with great fundamentals, everything looks phenomenal and yet the price is going down like a palantir. For example, for a long time, that's called buying the dip, but if you have a loser on your hands, don't buy the dip just to lower the average, because you hope it somehow miraculously will go up a dd. For example, when the chinese government decided to perform an all-out on dd, everybody kept saying to me: well tom, look at the stock price, it's so low! Yes, because the fundamentals are trash.

The regulators are about to go bazooka on this company. There's no reason to keep buying just because it's cheaper, the only reason you buy the dip. If you think the fundamentals are phenomenal and the market is making a mistake which happens sometimes, but you got ta identify where the buying the dip differs from collecting garbage. Now the next mistake, i call doesn't matter, wasn't selling anyways.

What do i mean by this? If your stock is having a bad day, you might get tempted to basically say hey, can't take this anymore. I had enough of this stock and sell it now. This is where exactly the previous rule, the 24-hour delay rule, would save your ass, but let's say you forgot about it. Let me remind you of a second rule.

There's one thing you need to understand: if you had no intentions of selling that stock on that day, that little dip or a huge dip is just a virtual loss. Unless you sell it, you don't materialize it it's just a number on the computer screen. However, if that's not the case and the fundamentals are great and the stock is just dropping because of panic selling, i personally wouldn't want to materialize the loss to make it real. Why i'm just going to sit out? Wait the storm be stoic about it.

Wait until it goes back up and just chill i wasn't selling anyways today. Why do i care about the dip? But of course circumstances can change and you have to look at the fundamentals. If there's any systemic risks regulator risk something really nasty happened, that the company was really hurt by might be a good time to actually trim your position, but not just because of other people selling. Now i hope this was helpful.

Let me know below, if you have any questions, if you have any tips you want to share with us share below in the comment section, i'm sure a lot of the viewers would love to hear this. I'm going to try to go over every single comment can't make any promises i'll do my best shout out to people who sold me this shirt. This was an impulsive buy by the way. I absolutely love it i'll see you tomorrow,.

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