Investment Grin Of The Day Google
Why You Should Never Ask Your Friends And Family For Money
Continuation from yesterday…..(How To Raise Money From Your Friends & Family)
In the industry, family money is oftentimes called “Dumb Money”. It is dumb because the people who are making any said investment decisions are making them based on various emotional factors as opposed to an in depth analysis of your business idea and/or your business deal.
And in most of the cases the conversation goes something like this. “Hi…. Mom, Dad, Uncle Bob or my best mate Jimmy, I have this wonderful business idea that will make me filthy rich, but I need money to make it happen. Can you give me $10,000 for 5% of my brand new company? When it succeeds over the next 6 months I will be worth billions and you will be worth millions. How about it?” Believe it or not, but in most cases this type of a conversation is good enough to start your capital raising process.
What’s more, everyone has a different type of a relationship with their friends and family. Whatever that situation is for you, these folks are still the easiest group to raise money from. Remember, they trust you and they trust your judgment. In fact, chances are, most of them would like to see you succeed. If they like your idea and have extra money the probability of you getting that money is fairly high.
Now, and this is very important.
Just because it will be easy for you to raise money from this group doesn’t mean that you should nor does it mean that you should take advantage of their trust. It is highly recommended that you approach your family and friends in a professional businesslike manner. Just as you would any other investor. That means your “ASK” and the rest of the documentation should be ready to go. Finally, you must keep the following points in mind when trying to raise money from your friends and family.
- You are likely to lose this money. The failure rate at this stage of the game is very high. If losing your friends or relatives money will have a severely negative impact on your relationship with them, it is better that you reconsider. Better yet, decide what is more valuable. Your relationships with them or the money. If it is your relationships, DO NOT ask them for money.
- Only raise money if you are 100% confident in your business idea or product. If you are not entirely confident, keep working on it until you are. Never raise money from this group if you are going on a hunch. It is almost certain that you will regret it later on.
- Only ask those who can afford to lose it. Do not ask your 95 year old aunt Judy for a $5,000 investment into your HotGirWithSmellyArpits.com business idea if she relies on her social security for income and sometimes has to choose between her medication and a good meal. For god’s sake, have some consciousness.
- Anticipate paying back the money. Before you ask your friends or relatives for money, clearly understand that you will have to pay this money back one way or another. Even if you lose it. It is the only way you will be able to keep your relationship with them intact. That might mean working double shifts until all of your loan or investment accounts are settled (if your business fails).
- Approach you capital raising process in a legally correct format. Whether you are structuring an equity infusion or debt financing by your relatives, have all legal document properly structured and signed. Yet, do not go crazy here. A one or a two page simple contract will do at this stage. Plus, you do not need an attorney to get this done as there are a lot of resources online.
This process can be easily done though sites like LegalZoom.com or by writing your own contract. Remember, it doesn’t have to be complicated. Just an outline and what they should expect out of the deal. Should anything go wrong, it will protect both them and you from any unintentional developments.
That about covers raising money from your friends and family. The next best option you have is borrowing that money from various sources.
To Be Continued Tomorrow…..(Why Am I Seeing This On A Financial Website?)
Why You Should Never Ask Your Friends And Family For Money Google
Buy Low, Sell High, Go Short & Cover Investment Strategy Rules
Continuation from yesterday……..(Which Investment Strategy Is The Best)
Rule #1: Buy Substantially Undervalued Securities (Minimizing Risk & Maximizing Returns).
This particular rule applies to both value and growth oriented investments. In particular, we are looking for the following stocks or situations.
- Stocks of companies that have declined in value 50-90% over the last few months or years. At the same time, the underlying business or industry conditions suggest that the things are about to improve. In other words, recent fundamental developments might be mitigating whatever issues had caused the stock to decline so much in the first place.
- Stocks of companies that are growing at a fast pace (large or small), yet their market valuations are well below their intrinsic values. This situation typically occurs at bear market bottoms or after sudden market crashes.
- Stocks of companies that are turning their fortunes around with new popular products, restructuring, asset divestiture, new management, etc….. Yet, their positive efforts haven’t been recognized in the marketplace thus far.
By concentrating strictly on the above areas, we zero in on the la crème de la crème available in the stock market at any given time. In fact, the selection criteria’s above are so stringent that investors should not be able to find that many stocks satisfying all of the requirements. Especially in aging bull markets and/or at market tops. For instance, as of today (August of 2014) I am unable to find a single stock issue that would match up to any of the requirements above.
What do we get in return when we implement such stringent requirements?
We end up identifying individual stocks that have the highest probability of experiencing explosive multiyear and multi bagger growth in its share price. As outlined in my book The Hunt For 10 Baggers.
Rule #2: Sell & Go Short When Technical and Timing Indicators Confirm (Trading)
As mentioned earlier, one of the biggest mistakes investors make is they don’t know when to get out. The investment industry has done a fairly good job brainwashing people into believing that the best holding period is forever. So much so that nowadays everyone is trying to follow in Warren Buffett’s footsteps.
Unfortunately, the reality is quite different. Look at almost any stock chart and you will see even the most successful companies drop 50-90% at one time or another. For some it’s a regular occurrence. Making the “hold forever” investment premise not only obsolete, but truly foolish. That brings us to the next set of rules.
- Always be ready to liquidate your long positions and go short if technical indicators suggest that the stock price is about to break down. No matter how great the underlying fundamentals are at the time.
- Always be ready to liquidate your long positions and go short at bull market tops. No matter how resistant to such bear markets you believe your stocks or industries are.
- Always be ready to liquidate your long positions and go short when the underlying stock price has experienced a massive run up and could now be considered in a highly speculative bubble. This rule applies to all market conditions. Bull and bear.
To Be Continued Tomorrow…….
Buy Low, Sell High, Go Short & Cover Investment Strategy Rules Google
What You Ought To Know About Today’s Trading Range
9/10/2014 – An up day with the Dow Jones up 55 points (+0.32%) and the Nasdaq up 34 points (+0.75%).
In you haven’t noticed, the market has literally flat lined since August 21st ….. going straight to heaven or perhaps hell. Depending on whom you ask.
On a more serious note, the Dow has been stuck in very tight 150 point trading range over the last 14 trading days. Either distributing or consolidating. Whatever it is, one thing is for sure. The market is storing a massive amount of energy for an upcoming move. Whichever direction that move might be.
What’s more, despite a constant bullish hype surrounding today’s market, the Dow is up a miserly 2.8% year-to-date. In other words, I continue to maintain that the Dow has been storing a massive amount of energy since December 31st, 2013.
For what purpose?
For a very powerful move ahead. If you would be interested in learning exactly when this powerful move will start (to the day) and which way the market will break…..please Click Here.
(***Please Note: Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). Daily Stock Market Update. September 10th, 2014 InvestWithAlex.com
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Killing Stress
Continuation from yesterday……..Simplicity Is The Only True Path
Simplicity is the only true path.
Follow the exercise below and make it a daily practice.
EXERCICE #4:
As before, find a quiet and preferably dark place where you will not be bothered over the next 30 minutes. Leave your cell phone and all other devices behind. Once again, it is crucial that no one interrupts you over that 30 minute period of time.
Step 1: Select a meditation posture. You have two choices.
- Most commonly known as a Buddha posture. Sit down with your legs crossed and your spine straight. Interlock your fingers and let them rest on top of your crossed feet. Close your eyes. (Google “Buddha Posture” if you need a visual representation).
The posture above is an optimal position for maximum energy accumulation. When you sit in a Buddha posture a number of things happen. First, by interlocking your feet and fingers while closing your eyes you create a perfect energy circuit within your body. When the circuit is complete, no energy leakage is possible. Allowing your body/mind configuration to accumulate the maximum amount of energy possible. Second, when you are sitting straight a higher dimensional door opens up on top of your head, allowing more universal consciousness energy to flow in with ease.
- If the position above is uncomfortable, your next best bet is to lie down on your back with your fingers interlocked and your heels touching. Eyes closed. If fact, this could be called a “Casket Posture”. Yet, keep one thing in mind. As you continue with your daily practice it is advised that you slowly transition to a Buddha Posture in order to maximize the benefits of meditation.
Step 2: Clearly understand what your objective is.
If you recall, in our prior exercises the primary objectives were to observe our thoughts, feelings and emotions. In one form or another and as an outsider looking in. True meditation is a little bit different. The objective is not to observe, but to stop all of your mind functions (thoughts/feelings/emotions) while remaining completely aware. The difference is minuscule and easy to miss, so pay very close attention.
True meditation is oftentimes called sleeping while being aware. In other words, all of your mind functionality must be stopped. Completely. And while that might sound easy enough, it is one of the most difficult things to accomplish. Try and see for yourself. If you are new to medication, chances are, you will be able to stop your mind for 15-45 seconds before realizing that your mind had already shifted into an active thought process and without you even becoming conscious of the fact.
You might be thinking about your ex and how they have done you wrong, what you will have for dinner, whether or not you have enough time to finish one of your projects and a million other things. Point being, and this is incredibly important to understand, you mind will actively wrestle control back and shift your entire being into an active state of thinking. That’s how cunning the mind is.
To Be Continued Tomorrow……(Why Am I Seeing This On A Financial Website?)
Investment Wisdom Of The Day
“October: This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” ― Mark Twain
How To Raise Money From Your Friends & Family
Continuation from yesterday…..(Beggar Thy Neighbor)
Beggar Thy Neighbor:
Ask your friends and family for help. Outline what you are trying to do and how you will compensate them once your business is up and running. In essence, you are opening up credit lines or “favor lines” with the people who can help your business get going.
For example, do you have a relative who rents office space for his or her own business? Great, ask them for a free desk space or a cubicle.
Do you need a small size production run or products to sell? See if you can talk your local supplier or manufacturer into doing it on a 30-60-90 day credit terms in return for payment, interest and future business.
Do you have a friend who is an attorney? Super, ask him or her to help you incorporate or for free legal advice in return for future business and referrals.
You get the idea. Think about. There is no risk for either the manufacturer to manufacture (the order is too small) or for your relative to allocate one cubicle of space for your use. In fact, you would be surprised what some people would be willing to do once you explain your situation honestly. And that would save you a ton of money and time in the process. Something that money cannot buy when you are trying to get your business off the ground.
Revenue Financing: If you have gotten thus far your product validation tests were a success. That means you were able to sell your products or services and generate some sort of revenue. The next best option you have, particularly if you are moving forward with the option of self financing, is reinvesting all of your revenues right back into the business.
Outside of the obvious benefits above, there a few more. Particularly, if you plan ahead and reinvest your revenue/income at the appropriate rate you can achieve maximum growth velocity for your new business venture while getting rid of your tax bill. In short, attempt to get to some sort of a revenue for your business as soon as possible, then use it to grow your business at a fast pace.
While these are your best options for self financing, it is quite likely that not many people will have the access to their own capital or a network of people that can help them. If such is the case, your next best option is to ask your friends and family.
Friends & Family:
If you do not have access to your own capital the next logical option is to ask your friends and family. If you do everything right, it shouldn’t take you more than 1 week to cover this phase of the capital raising process.
In the industry, family money is oftentimes called “Dumb Money”. It is dumb because the people who are making the investment or lending decisions are making them based on various emotional factors as opposed to an in depth analysis of your business idea and/or your business deal.
And in most of the cases the conversation goes something like this. “Hi…. Mom, Dad, Uncle Bob or my best mate Jimmy, I have this wonderful business idea that will make me filthy rich, but I need money to make it happen. Can you give me $10,000 for 5% of my brand new company and when it succeeds over the next 6 months I will be worth billions and you will be worth millions. How about it?”
To Be Continued Tomorrow…….(Why Am I Seeing This On A Financial Website?)
Which Investment Strategy Is The Best
Continuation from yesterday…...(Costs Associated With Short Selling)
Finally, before we can answer which of the investment strategies above is the best one, we have to consider an important issue. We must first define what goals most investors have. Unfortunately, the investment industry has done quite a job cutting and dicing what should be a simple classification into a million different pieces. Anything from divorced housewives on fixed alimony income to 95 year olds with advanced derivative strategies.
Luckily for us, human nature and greed never go out of style. If given a chance, 99% of all investors, no matter the age or risk profile would want the exact same thing.
- A massive capital gain.
- In the shortest possible period of time.
- While taking on very little, if any, risk.
The real question becomes, which of the strategies above can get us to the above mentioned points the closest?
As you can probably imagine, none of them. Every one of the strategies above has their own shortcomings that would jeopardize the objectives above. For instance, most value investments take a few years to play out. Blowing our “short time frame” requirement completely out of the water. Investing in growth companies is inherently more risky and trading or overtrading rarely leads to large capital gains.
So, what is the ultimate solution?
As always, the answer lies somewhere in between. If we are to bring the strategies above together, we might just be able to achieve our ultimate objective. By taking the best parts and disregarding the worst, we might be able to stitch together a strategy will satisfy all of our high return and low risk profile requirements. Let’s see if we can get it done.
Value Investing: (Minimizing Risk)
- Let’s Take: Undervalued and out of favor companies. Cheap stocks that for one reason or another selling well below their intrinsic value. Stocks that have collapsed over the last few months or years to the tune of 50-90%. Stocks of companies that are turning around, but their positive change haven’t been realized by the market.
- Let’s Disregard: Uncertain holding periods and buying stocks with weak technical indicators.
Growth Investing: (Maximizing Returns)
- Let’s Take: Fast growing companies. Stocks that are appreciating at a fast pace. Stocks with strong technical indicators.
- Let’s Disregard: Highly speculative companies. High risks associated with extremely volatile industries and overvalued companies.
Trading: (Perfecting Timing)
- Let’s Take: Clearly defined rules and market timing techniques. The ability to take both sides of the trade….long and short. The willingness to study trading and make necessary adjustments. Strict risk management rules.
- Let’s Disregard: Overtrading. Trading without rules or a clearly outlined strategy. Trading on hunches and gut feelings. Laziness.
The next step is to put all of the above selections together.
Won’t we end up with some sort of a Frankenstein monster?
Not at all. A clearly defined investment strategy below is the ultimate outcome.
To Be Continued Tomorrow…..
Simplicity Is The Only True Path
Continuation from yesterday…....(How Meditation Really Works)
It is identical to a boiling water analogy. As the water heats up it stores energy. The instant it hits 100 C, water turns into vapor. Transforming itself from one state or dimension into another. Not at 99.9 C or 100.1 C. At exactly 100 C. Once your internal energy level reaches a certain point, your consciousness will make the jump. And only meditation can help you with the entire process.
Yet, the quantum jump above does not come with ease. Mystics, spiritual leaders and some religious folks dedicate their entire lifetimes to the pursuit of this higher state of human consciousness. It took Buddha 12 years of full time effort, struggle and many near death experiences to get there. Jesus had disappeared for 18 years before reappearing as an enlightened man. Now, we won’t go any further down the rabbit hole in this book, but you are need to be aware of the following. While the process itself is not that difficult, it is easy to miss the final destination due to a number pitfalls along the way. Pitfalls that your mind, environment and ego will generate out of thin air.
Do you need proof?
Again, this cannot be learned or proven. The phenomenon above is not a mathematical equation. Just as any feeling or emotion, it can only be experienced. And the only way to experience it is to start meditating.
When it comes to STRESS, meditation becomes the only solution. It is only through meditation that you will be able to erase all STRESS and STRESS associated energies out of your life. Completely and forever. If you are to make meditation your daily practice, no other outcome becomes possible. Guaranteed.
What should my next step be?
Here is what you need to do next.
- Make meditation your daily practice. Make a commitment and do not skip it.
- Allocate at least 30 minutes per day to your daily meditation practice. Typically, the formula states that the older you are the more you should meditate. Where one year of life equals to one minute of meditation. For example, according to some practices a 45 year old person should meditate for 45 minutes a day and a 65 year old should meditate for 65. If you are new to the entire experience, your 30 minute daily practice should be a good enough start.
How do I meditate?
Whether or not you are familiar with meditation, it would be best if you immediately dismiss all of your preconceived notions and concepts associated with meditation. Particularly, if you live in the West. In Western cultures all spiritual practices become circuses of sorts, they become big businesses. Where the latest and the greatest meditation music or posture or technique is the only way to go. All of that is absolute nonsense. It is all garbage that should be thrown out where it belongs. At the heap of cow manures.
Do you think Buddha ever joined a group meditation session? Do you believe Jesus listened to tapes of high frequency meditation music? Can you imagine Chuang Tzu reading the bestselling book about the new techniques of sleepwalking mediation? Absurd. Garbage. All of it.
Simplicity is the only true path.
To Be Continued Tomorrow…...(Why Am I Seeing This On A Financial Website?)
Why You Should Be Embarrassed Of Being Smart
9/9/2014 – A down day with the Dow Jones down 98 points (-0.57%) and the Nasdaq down 40 points (-0.87%).
The notion of bulls Vs. bears is an idiotic one. A smart money manager should be able to make money in both bull and bear markets. Yet, it is just as important to understand the psychological mindset of most market participants. When approached in the proper fashion, this reading will give an indication of what the future holds.
Further, over the last couple of weeks I have destroyed the notion propagated by the mainstream financial media that this is the most hated rally every. What’s more, I have shows that the number of bulls/bears is the lowers it has been in close to 30 years. Market Bears Hit The Lowest Levels Since Just Before The 1987 Crash
Despite the fact, the mainstream financial media continues to go after non existing bears with the vengeance. First they were simply stupid, then they were “Market Unbelievers” and now…….get this…..‘Embarrassed’ bears will be forced into stocks: Pro That right, ladies and gentlemen, the best researched market participants will be so EMBARRASSED that they will be forced into buying stocks.
Who cares? No one, but this is an important psychological factor that clearly points to where this market is heading. When bulls have to shame bears into buying stocks, only one thing is certain, the end is near.
This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2014-2017. In fact, when it starts it will very quickly retrace most of the gains accrued over the last few years. If you would be interested in learning when the bear market of 2014-2017 will start (to the day) and its internal composition, please CLICK HERE
(***Please Note: Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). Daily Stock Market Update. September 8th, 2014 InvestWithAlex.com
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