Investors Can Beat The Slaughter With One Simple Strategy

Investors can easily avoid getting slaughtered if they studied a certain animal, and avoid doing what it does!  Learn more.

If you’ve been in the stock market, the last year must have been painful.

After peaking in December last year, we’ve been on a steady decline.  Last month gave many hope that the bear market was over, but was it a bear market rally or has the market really bottomed?

It really doesn’t matter.  Because both bull and bear markets offer opportunities.  There’s that old saying on Wall Street, “bulls make money, bears make money, but pigs get slaughtered.”

We can make money in both bull and bear markets.  The only ones who don’t make money are the pigs – and so we must avoid being pigs!

Lessons we can learn from pigs

What are pigs?  Well, I don’t know about you, but when I think of pigs, they tend to be greedy, fearful and lazy.

Greed will make pigs chase their food, or in this chase the money.  They’ll try to get instant gratification, instead of trying to make money over the long term.  Pigs also tend to be fearful, fleeing at the first sign of danger.  Being lazy, pigs tend to invest based on “hot tips”, instead of buying fundamentally sound companies.

All of these are killers when it comes to investing.

Instead, when investing, we need to do the opposite of pigs.

Instead of chasing the money, as investors, we should never chase the money, but look for points where it is best to buy, that way we can make money consistently over the long term.

Instead of being fearful, we need to understand the business of the company, so that when everyone is fearful, they can rationally buy.  Warren Buffett says to be greedy when everyone is fearful – which is a quote I don’t really subscribe to myself, because greed makes people do silly things.  Instead, I prefer what he said about socks and stocks – and to always buy at a discount.

Which brings me to my last point – to understand if the stocks are actually at a discount, we need to understand the business of the company.  Once we understand the business of a company we will be able to tell if the stocks, like the socks, are great value, or if they’re on the way out, and are about to do an Enron or Wirecard.

I believe most of us aren’t pigs.

We might sometimes think we’re greedy or fearful.

But fear and greed are hardwired in us.  We teach our students that it’s part of their survival instinct.  It’s what kept our ancestors alive – fear helped them run from the lion, greed helped them ensure they had enough food for the hard times.  It’s thanks to that fear and greed, that our ancestors survived long enough for us to be around!

So don’t fight it, but understand it.  Which is exactly what we teach our students, to understand that and work with it, using their Purpose, which we incidentally help them discover.

We sometimes think of ourselves as lazy.

For instance, when we fail to planning our finances, or understanding the business that we invest in.  But in my experience, working with our students from around the world, it’s not laziness, but not knowing how, in a way that is manageable for someone looking to create an additional stream of income.

We teach our students who take our investment programs to use Purpostry instead of mastery.  Purpostry or Purpose Led Proficiency allows you to use your Purpose to determine the level of proficiency you need to achieve your purpose – which is have a side income.

Isn’t not mastering something dangerous?  Well, you learnt to drive to get yourself from point A to point B, and that’s not mastery – that’s Purpose Led Proficiency, and you’re not dangerous are you?

And the key to understanding companies so we can invest when they’re at a good price is Purpostry.  Not mastery.