Last Updated on January 15, 2019 by Sultan Beardsley
- Allocate 50-70% of your paycheck to your brokerage account if you truly want to achieve 1% status. 5-20% would suffice for a source of supplemental income.
- Decide on a sector or industry you want to specialize in; ideally something you have formal education or experience with.
- Due Diligence . Form a watchlist of companies and heavily research their fundamentals. Materials we utilize in our DD for biotech stocks are:
- Company Press releases (PR)
- Corporate Presentations
- Pre-clinical and clinical trial data
- Management Team
- Annual reports, and Forms 8K and 10Q
- Seeking Alpha articles by research analysts. A few we like to use are Bret Jensen, Michael Sheikh, DrTranBiosci, and Vision and Value.
- Research the bear thesis (i.e. an argument for why the stock will go down)
- Look at Short interest
- Look at the options market and the volume of open interest for calls vs. puts.
- Investor Sentiment: Explore StockTwits, Twitter Yahoo finance, etc.
- Select a company you feel is undervalued and buy shares with the money you allocated with a price target in mind.
- Continue accumulating until shares until the company is fairly or over valued, then hold. Sell if some material change substantially lowers you probability of success.
- Sell and take your profit once your price target is reached. Do not get greedy.
Over the past week Zion received a handful of inquiries asking why you should invest 20% per paycheck rather than buying that sweet Gucci belt you’ve been plotting to get. Anyone who knows him can attest he is not one to advise against spending foolish amounts on designer, but let’s entertain a different perspective.
‘You can work for your money, or your money can work for you.” It sounds cliche, but it’s something to genuinely consider because it can truly change your life. We hope to inspire you to adopt and implement this mentality as we have.
Money spent is money gone. Right into the hands of someone else who may invest it and build their own wealth, or spends it . The popular idea that we operate in a rigged system controlled by the ‘1%’ is a fallacy. People move in and out of the the 1% every day. If you make $160K a year at age 25 you’ve made it for your age bracket. About $470K if your above 50. Once you start investing and locking in gains $160K all of a sudden seems less daunting. Read here to learn the qualities you must emulate to be a successful investor.
Money invested (wisely) is like planting a seed that grows into a vigorous and prolific plant yielding 10% to 1000’s% your original investment. And the beautiful thing about it, especially in the biotech sector, is large gains can be achieved in a relative short period of time. A word of caution though, when it comes to biotech stocks timing is especially important. The last thing you want is to have money tied up for years before making a profit.
Back to that Gucci belt
Gucci belt now? Or 10 later?
I know it’s hard to part with cash in hand. I mean, Zion splurged and bought a BMW (plz don’t do this), but in doing so forfeited the opportunity to buy 10,000 shares of $GALT when it was at $2.00 dollars a share in December, 2017. If he sold that today it would net him $60K! Not a bad return in 8 months time. Rinse and repeat a few more times and boom, you’re in the 1%.
Let’s say you don’t have the time, market acumen, or interest to manage your own portfolio. Index and mutual funds are the perfect solution. Popular culture portrays the stock market as unstable, risky, and for the elite. But this is not the whole truth. Individuals like us and our followers recognize the stock market as our nation’s wealth equalizer.
Let’s say you start with $500 and simply put $100 a month into an index/mutual fund and keep doing so for 35 years. In this scenario we will assume an average interest of 7% as this historically has proved true. After this 35 year period you’ve accumulated nearly $200k while contributing less than $50k! Compounding is a beautiful word and you should get acquainted with it at asap.
The market is often seen as a dark force that devours money from the inexperienced and non wealthy at the benefit of the rich and powerful. There may be some credence here, but we perceive it as the inverse. MS Money Moves firmly believes the average high school or college student with dedication, discipline, and patience can achieve his or her financial goals via the stock market. What makes us so confident? We’re doing it right now and experiencing just how possible it is.
The deciding factor underscoring whether you’ll make it or lose money is summed up in two words, ‘Due Diligence‘. Basically, do your homework, form a thesis, act decisively, maintain confidence in your decision. If the price goes down and your thesis still holds true-buy more. If something changes that weakens or destroys your thesis-sell. Simple as that.
To present you with practical, hands on education and assistance to ease the learning curve and help you make money! We want to undertake the dissolution of the 1% because each and every one of you will get that $160K, or $470K making it the 100%!
Regardless whether you want to become an active investor and make high percentage gains annually, or take a passive investment approach, you need a brokerage account.
The following are links to brokerage platforms with our stamp of approval.