For the past five years, the s p 500 did 91. That means, if you put in a hundred thousand dollars in 2017 right now, you have two hundred thousand dollars. It's a cheat code. The s p 500 is always going up long term, and despite this cheat code in the system, ninety percent of all retail investors lost money in the last five years.

This is literally one of the worst pyramid schemes you can ever imagine. You have ten percent making almost a hundred percent of the money, ten percent of the people, a hundred percent of the money, while ninety percent of the people are losing money and the reason they're losing money is so ridiculous and so easily avoidable. It just blows my mind so in today's video i'm going to explain the worst, absolutely worst, investing mistake, that is butchering your stock portfolio. Now, look i'm making this video, because i want to help you.

I don't want to see people lose their hard money. I don't have a course to sell, i don't have any paywall where i hide the real information, i'm not the freaking oracle. I don't have the formula to guarantee success in the stock market. Nobody does in fact, if they guarantee it they're, probably scammers.

Now. I do know how to avoid idiotic mistakes, to improve your chances of not losing money in the stock market and that i'm gon na share in this video for free. So you guys have that in your brain before you do some stupid, a look as always before we start. Don't click, nothing, don't smash.

Nothing don't buy nothing. Now, a few years ago, a friend of mine bought a stock of a company which i will reveal at the end of this video see if you can figure out which stock i'm talking about, so he bought a stock. I want to say 2019, roughly around january 2019, for 70. Now he wrote up all the way to 180 dollars.

For about a year. At 180, there was a guy who bought the stock from him right. My friend was happy. He almost tripled his money in the year happy days now, the guy that bought the stock from him for around 880 sorry 180.

He basically sat on it for another month and a month later, the stock went down all the way to 109. So within a month the guy who purchased the stock from him lost a lot of money. In fact, he lost almost 70 on this stock. Wait 71 dollars on the stock, so basically he got screwed and he felt so awful about it.

Oh, my goodness, this talk is crashing. He literally could not take the emotional pain that comes with having a virtual loss and he sold it. He sold it because he was scared out of his goddamn mind that the stock is going to crash to zero. My friend actually bought the stock from him.

He bought it straight up. Let's go 109. He bought it set on it all the way until november 2020, when the stock hit 1200 dollars. That means he 10xed his money within just a year and a half.

Now that other guy, who just sold it to him foremost back into the stock, he was like. Oh my goodness, oh my goodness, this idiot neighbor of mine, just you, know, 10x his money over this. I want a piece of that, so he followed back into the stock. My friend happily sold it to him at 1200.

This stock is now at eight hundred dollars, so this guy's - oh, my god, i can't believe i did the stupid mistake again. My friend buys it back from him for eight hundred dollars. Another month go by the stock is at one thousand twenty five dollars today. So the moral of this story is, of course, i'm using hypothetical people here, but on the one hand, of this trade you always have the institutionals.

On the other hand, the retail investors - and you can pretty much guess, which is which, in this example, i mean it's not hard to understand. Who is the retail investor and who's the institutional, the institutional always wins, because they always buy cheap, sell, expensive and their retail investors make the same mistakes again and again and again costing them a lot of money. This is how stock goes from 70 to 1025 within just a couple of years, and yet most retail investors lost money now, look how to avoid it. It's quite simple.

It's mind, shockingly simple: to avoid these stupid mistakes, look all you got to do. Is you got to follow a few simple rules? First of all, not doing any research on the stock is going to cost you a lot of money. You have to know what the company does, what kind of business model? What's the total addressable market? What's the business environment is like? What's the management like you have to know everything about this company as if you're buying the actual business in its entirety just buying stock based on name without doing any research? That's an assurance of failure, number two, not diversifying but tom. You have forty percent of your portfolio in one stock and volunteering, a dangerous one true, but i also have 40 of my entire portfolio in the s p 500, which is the most diversified investment you can make.

So 40 of my portfolio is literally diversified across the u.s economy, and i play with another 40 percent on pilot here and the other 20 is on google and tesla, so at least at least have the understanding that you cannot be arrogant by saying hey. I can pick five or six stocks, individual stocks and i'll do better than the u.s economy than the s p. 500. That's just pure arrogance! You got to put some money on diversified investments like the s.

P. 500 number three getting rich, quick mindset. Now, if you're in the stock market to get rich quick, it's a bad idea, it's not gon na work. That's not what it's for the stock market can give you two things in the bull market.

It can actually increase your capital. Make you a little bit more? Financially sustainable in bad times, it can serve as a defense mechanism to prevent your money from getting eroded from inflation. In neither of these cases, you're not getting rich overnight. People seem to think that everybody will follow the same path that dave lee had when dave lee went all in in tesla it exploded out of the stratosphere.

He made a whole bunch of money that happens, but for the most part it does not happen to most people. It's like saying: hey, i'm going to go up there. You know pick up a basketball, go to the nba next day. Easy be easy, peasy, not work.

Like that, it is what it is now look number four is ignoring tax, one of the horrible mistakes that people do. They forget this tax to pay uncle sam or whatever uncle you have whatever country you're at wants a piece of your action. Now, in the united states at least, you can easily avoid that by maximizing your tax advantage accounts the 401ks, the iras, where you literally don't pay any tax on capital gains. Now, once you've done, that, there's also other planning methods to optimize your taxation.

I'm not gon na get into that here, but at least have the understanding of what is short-term capital gains. Long-Term capital gains people buy and sell quickly. They don't realize short-term capital gains are not to be with now. Also, warsaw rule a lot of people forget about the warsaw rule, which also can be easily avoided if you're trading actively by setting up an llc or an escort, there's a lot of things.

You can do around optimizing your tax, it's going to really improve your performance and a lot of people. Just let it go now. Look. The next thing is not looking at fundamentals.

Oh my goodness, blindly going balls deep in investments. You know gosh what they do about. You know it's like kenny rogers, you got ta know when to hold them. You got ta know when to fold them.

You got ta know: fundamentals of the company, what's the price to sales ratio, what's the debt to equity ratio, what the balance sheet looks like what the cash flow looks like you have to understand these things. What's the margins, what's the gross margins? What's the ebitda? What's the operating margin, you have to know these things now. Look. The next thing is harder than it sounds.

Not controlling your emotions, not controlling your emotions is being basically in the casino mentality being unstable. Basically, you know when you're going to casino and you lose some money like i'm going to win it back or if you want some money, it's like i'm going to play it. It's not my money. It's just house money.

Both of these are just mirror images of the same, which is not realizing fake money and real money are completely different things. You can't get frustrated, you cannot get frustrated, you cannot get emotional, you have to be level-headed and calculated now. The next thing is hype. Following trends following this hurt mentality into stocks that you have no business in mind because, by the time you're buying those they're already parabolically up you're setting yourself up to be the sucker, you cannot follow the herd into hype stocks.

That's a really bad idea. Some people will make money, you'll hear about them a lot most of you will lose money and you'll be quiet about it. That's why you never hear about the bad cases unless, of course, your wall street bets where you do about it quite a lot. Now.

Look, the next thing is not taking responsibility. The market is manipulated. The floor is crooked. The internet is not fast enough, a whole bunch of slew of reasons that don't take accountability for what you're doing.

If you screwed up, if you up it's on you and you got ta admit it, so you can learn and get better for the next time, not to do the stupid. If you keep blaming others, you're, never gon na get better. Now the next thing is being impatient, being undisciplined, being unable to sit on cash, sometimes are just too scary and you got ta sit on cash despite inflation, despite the urge the itchy fingers to get back in sitting in cash is sometimes discipline. It's okay.

As long as you just don't, do it for two years and lose a whole bunch of money to inflation now look. The last thing is not having a clear set of rules and a clear system of how to screen and evaluate companies. If you don't have that, how are you making investment decisions based on what, based on what some youtuber is saying, i mean come on? You got to work out a system that is objective which you can follow to know exactly. What's the price of the stock once it hits it you're out before it hits it you're staying simple as that now let me know below.

If you want more videos covering the fundamentals and how you actually work out these things, i'm gon na try and respond to as much as i can see you in the next video.