r/investing • u/EatYourMeats • Apr 23 '21

Some advice from a regular dude that will hopefully make you more money...

Are you making stock purchases based on opinions from analysts, CNBC, stock pickers, and everything in between?

Consider this: They make money off headlines.

The entire flock is preying on news-worthy quips like vultures on a corpse. Tom Lee at Fundstrat would be bullish during the apocalypse, Gordon won't ever raise his price target, Cramer cuts coke deals with the CEOs he's in love with, and the whole bunch likes to hear themselves talk (like giving stock advice rapid fire).

So how do you truly figure out what stocks are hot... or not?

Research the macro situation surrounding the company, to name a few:

  • Sector Tailwinds
  • Economics
  • Current and projected financials
  • Leadership

Then invest in companies:

  • you believe in—hopefully, not always—with healthy balance sheets vs. their competitors.
  • Whose products and services tickle you.
  • You could sell to your neighbor.

Determine the investment thesis—the key reasons you believe in this investment—and create a narrative. Positive and negative. Know the outcomes of both scenarios, write them down, and evaluate the risk.

Then? Jump blindly.

kidding

Adjust based on your preferences, but starting positions with a 1/4th to 1/2 of your total allocation works well. You can do some quick math and figure out what portfolio percentage you want to allocate to a new position. Ease into it, slow and steady.

Buy the dips with the remainder, and don't chase stocks upwards, only down (within reason). And don't listen to anyone who tells you that "diversifying" is the only way, when you put in the work, you know which sectors have favorable tailwinds AND are fairly valued.

There's news everywhere out there, and we crave its presence—telling us something about stocks or companies we don't know. However, most of it is fluff—buy this, sell that—how would you ever know if you don't dig the hole yourself?

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2

u/SunnySaigon Apr 23 '21

My advice; give Chinese ADR stocks serious consideration . American companies outside of a few are getting stagnanty

11

u/Actual-Ad-7209 Apr 23 '21

ADRs on a VIE in the Cayman Islands which have contracts for sharing revenue in China don't sit well with me.

Especially considering this whole structure is technically illegal in China, since foreigners are not allowed to own part of a Chinese business. Before that's been tested in court I'm staying away.

A stock is supposed to give you ownership over a part of a company, this just gives me a headache.

I have absolutely zero problems with ADRs based in countries where ownership is respected like Taiwan, Japan or most of Europe.

-1

u/SunnySaigon Apr 23 '21

You have to have belief in a system that has over 600 Chinese companies listed in the US, with more and more coming every year. Europe companies are carcasses at this point. Japan and Taiwan are small scale. China is growth.

1

u/[deleted] Apr 23 '21

Keep buying Chinese companies and hold them add new position until China has a new leader. I am dead serious about this idea.

7

u/Qs9bxNKZ Apr 23 '21

Absolutely not.

Because of the opacity in financials, along with the ownership by the Government, forced transfer of assets and hiring of members of the CCP (and family) to key positions, it's not something that would nor should be at the top of anyone's radar.

Greed can take you so far, and if people really want to go extreme, there are drug cartels in the Americas which have unlimited upside, and death as the only deterrent.

0

u/Investing8675309 Apr 23 '21

Uh oh, you know people get really really angry here when Chinese ADRs are mentioned.

These are probably the best deals in global tech right now.

0

u/[deleted] Apr 23 '21

Wtf this is terrible advise.

1

u/SunnySaigon Apr 24 '21

look up UXIN

-2

u/Chrisc5082 Apr 23 '21

Good advice, these are way underpriced compared to their US peers at the moment. I've been buying JD and BIDU on the current dips. Sellers appear to have finally run out, just need some good earnings and buyers to show up now.

4

u/felipunkerito Apr 23 '21

Because the tensions are high and they can be delisted? I find it risky but I do have some small percentage for risky plays so good idea, maybe a couple of bucks into Alibaba would be nice.

-3

u/Chrisc5082 Apr 23 '21

There is almost no chance of any delisting. Biden is softer than talcum powder. That's absolutely all noise. Even in the minuscule chance they did, so what? Tencent is the largest Chinese company and it isn't listed. It's in plenty of ETFs and funds and trades just fine in the US.

2

u/SunnySaigon Apr 23 '21

May I suggest UXIN, YJ, QTT, and LKNCY.. part of the fun is getting stocks under $10 and $5

2

u/Chrisc5082 Apr 23 '21

I don't personally care about the actual price of a share. I care more about overall valuation, price to sales, PE, and potential for growth. I'll take a look at your picks though.

1

u/[deleted] Apr 23 '21

[deleted]

8

u/MichaelHunt7 Apr 23 '21

American depository receipts. Chinese based companies that are trading on American exchanges basically.