About this episode
In this episode we talk about red flags and sell disciplines on stocks.
There's a popular saying in investing: "Buy when there's blood in the streets."
A lot of investors interpret this to mean that if they liked buying a stock at $100, they'll LOVE buying it at $50.
We take a different approach:
- If there's blood in the streets, it has to be for a reason.
- Is there a better street for us to go down?
Averaging down on a losing position is one of the biggest mistakes many investors make.
Even the biggest moats can spring a leak, which is why we use nothing but math when making (or exiting) an investment.
Some of the most popular investment strategies (including the Dividend Aristocrats) have bad math and we talk about the poor fundamentals of these investment strategies.
We dive into the surprising math of these strategies.
We also share our 3 simple rules of sell disciplines, which haven't changed since 1998.
1. Position size limits
2. ZERO averaging down
3. Have a sell stop defined BEFORE purchasing a stock.
We hope you enjoyed this episode.
As always, feel free to email us: [email protected]
www.freedomdaysolutions.com
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