you need a plan where am i? where do i want to go? how am i going to get there? what are my chances...
TRANSCRIPT
You need a plan
Where am I?
Where do I want to go?
How am I going to get
there?
What are my chances
of success?
Read the following statements and
think about the actions of each person…
Jack Hackett was out on a Friday night and
was talking to a few mates. One of them
said that he had a red hot tip. He had
heard from a friend of a friend of a cousin
of a stranger who overheard a
conversation at a bus stop.
He immediately bought 10,000 shares on
Monday at 5c.
Mrs Doyle while having some tea, went on
the internet and found a numerology
website which proclaimed to have great
stock market strategies.
One such example was to buy the top five
stocks of an American index at 8 p.m. on
the night of a full moon and to sell them at
the Spring Equinox at 2.45 p.m.
She thought it was worth a try!
Dougal has a big interest in the stock market
and has done a number of courses on how
to profit from it.
He buys a book in Morocco that promised
anybody can make 50% growth in the year,
but it requires a lump sum of €50,000 to
start, 50 hours a week of research and an
accounting degree.
He buys the book, thinking that it can’t be
that hard and he will manage it alright!
Ted works in the I.T. sector and knows his
industry very well. He does a lot of
research to find some highly
undervalued stocks. He buys them and
leaves them alone.
He looks back in seven years time and
finds that they have doubled, but had
been at 500% after two years.
What do you think of these decisions?
Would you have done the same?
What do you think the likely outcome of these scenarios would be?
What could you advise these people to do instead?
He has no idea why that person at the bus stop felt the “hot stock” was a good buy.
He only bought one stock and didn’t spread his risk or diversify at all.
He didn’t look into the stock at all himself or get a knowledgeable opinion.
He didn’t have a plan as to when to sell
The strategy she found was not time
tested.
She did not check the credibility of the
author
He wasn’t willing to give the research
the time in order to follow the strategy,
which was time intensive.
He didn’t have the skillset to be able to
replicate the strategy, which clearly is
not easy to follow.
He didn’t have a plan as to when to sell
the shares
Easy to Follow
Time Tested
Make sense!
Understand why you’re buying
Know when and why you will sell
A number of stocks
“The stock market is just
for gamblers”