Jeremy is the author of Generation X Finance. I had the opportunity to have a nice little Q and A with him about investing.
What’s the first thing you look for when analyzing a stock before you buy it?
Jeremy: That depends on what the purpose of buying the stock is. Stocks I’m looking to purchase for short-term trading it is almost entirely in the technicals while a stock for a long-term investment I look almost entirely at fundamental factors.
Why are the investing experts hit or miss? Aren’t experts suppose to be right most of the time?
J: I think it depends on the time period of their predictions in regards to how right or wrong they are. Obviously the shorter amount of time for the prediction the more likely they will be wrong whereas you have a better chance at generally predicting the market.
When it comes to individual stocks and setting price targets or how far up or down they will go there is just too much going on to be accurate on a consistent basis. There are press releases, overall economic conditions, world events, investor buying or selling pressure, human emotion, etc. all at play.
What’s the worst investment move you’ve ever made?
J: Funny you should ask, I was in the process of writing up a post on my site about that very thing. I’ve many poor investment decisions but one in particular was pretty bad. It was a tiny little company traded on the pink sheets and I ended up buying a few million shares (They were priced at something absurd like $0.0001 per share) but there was a lot of buzz with the company and I thought for entertainment value who knows, maybe I’ll get lucky.
Needless to say I missed a huge run up in the stock and could have made about a 900% profit sometime during the first year but I held on. Three years later and all I have to show for it is a stock certificate that isn’t worth more than the piece of paper it is printed on.
Gimme a random piece of investing advice.
J: Don’t get emotionally involved with any investment. Whether it is an index fund in your retirement account or 100 shares of a stock you are looking to flip the next day for a profit, once you become emotionally attached you will make poor decisions. Always stay completely objective, which I know is easier said than done.
What’s one site that you like that people might not know about?
J: While this site may be known by many people I think it is very under appreciated: Morningstar.
Even the free content on their stocks and mutual funds is put together in an outstanding easy to read way. For those who choose to become premium members, some of the tools are simply outstanding.
If you want to chat, my AOL IM name is “henrybrohans” or you can email me at henry@binarydollar.com
