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Slow and Steady

  • Zane Carver
  • Oct 19
  • 3 min read

Updated: Nov 14

Lesson 1


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Top Stock Tips for Savvy Investors: Blog Post

Big change in focus for me. Just focus on long term trades. There was a study done where people that were dead for 3 years their portfolio on average did better than people that were alive.

#1 Find a good stock at a good price.

Needs to have a valuation of over 1 billion dollars. Needs to be a stock growing at least 5% annually. Ideally, you want to buy this stock at a discount. Approaches that have served me well. -Stock crashed because of a war. Poly/Veon -Stock crashed because of fraud Luckin Coffee -Stock was the future and growing fast Tesla -Stock created HBM memory and the business was no longer cyclical and growing fast. Micron I found Micron by comparing the PE to Forward PE spread. I found Veon and Poly by looking at stocks that plummeted because of the war, but metrics were not affected. I found Tesla from hearing they couldn't keep up with demand. I found Luckin Coffee by looking at Metrics and realizing the metrics did not make sense based on total revenue.

Rules for Investing in Stocks

  • 80% Long Positions: Prioritize long-term growth opportunities.

  • Under 12 Positions: Keep your portfolio manageable and diversified.

  • Ensure Revenues Are Growing: Seek companies with steady or accelerating sales growth.

  • Buy on Red Days Only: Enter during market dips to secure better prices.

  • Volume > $1M Daily: Ensure liquidity; max 10% of float if volume is lower.

  • Invest 1/3 to 1/4 of Your Commitment: Build positions gradually (e.g., $10K of a $30K target), allowing you to double down 3-4 times.

  • Forward PE Spread: Confirm the forward P/E exceeds the current P/E, with a growth rate supporting the difference (e.g., 10-15% annual growth).

  • PE Below Average: Target stocks with a P/E slightly below the industry average (e.g., <30x) before buying.

  • Target Price Commitment: Set a realistic target price; re-evaluate when 10% from the target or with significant news.

  • Buy Undervalued: Enter when the stock is significantly below its intrinsic value.

  • Don’t Buy Forward PE > 50: Avoid stocks with excessive future earnings multiples.

Building a Position

Start with 1/4 of your commitment (e.g., a portion of your total investment amount), adding incrementally during dips to build up to your full position. This spreads risk and averages down your entry price.

Rules for Investing in Stocks on Sale

Averaging Down

  • Historic PE 30% Below Normal: Buy when the P/E is 30% less than its historical average.

  • Down 20% (Beta > 1): Double down if a stock with higher volatility (beta > 1) drops 20%.

  • Down 10% (Beta < 1): Double down if a stable stock (beta < 1) falls 10%.

  • Revenue Growing/Flat: Ensure sales are at least stable or trending upward.

  • Volume > $1M: Confirm adequate liquidity; max $200K if volume is lower.

  • Forward PE Spread: Verify the forward P/E exceeds the current P/E.

Averaging Up

  • Subtract Dividends: Adjust potential returns by subtracting the annual dividend yield.

  • 20-37% Decline from High: Buy if the stock drops 20-37% from its recent peak.

  • Target Price: Re-evaluate when 10% from the target or with market shifts.

Before I Sell

  • Sell on Green Day: Lock in profits during upward market movements.

  • Target Reached?: Exit when the stock hits your predetermined target price. Then sell half.

  • Forward PE Target?: Consider selling if the forward P/E reaches a reasonable industry level.

In Summary

  • Find a good stock. Buy the stock, ideally in stages (build the position, don't buy it). Be prepared to wait 3-7 years for the stock to make you money.


Investing Quotes to Live By:

  • "The big money is in waiting, not buying and selling."

  • "The stock market is a device for transferring money from the impatient to the patient."

  • "Buy when everyone else is selling, and hold when everyone else is buying."

  • "The biggest risk of all is not taking one."

  • "When a ball hits the floor, it bounces."

  • "Dreams before metrics."

  • "Focus on the companies, not the stock."

Motivational Quotes

  • "To have more than you've got, become more than you are."

  • "Formal education will make you a living; self-education will make you a fortune."

  • "Don’t wish it were easier. Wish you were better."



Conclusion


Stay calm and stick to the plan.

 
 
 

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