The Bull Hunters Guide

Greetings once again, and thanks for returning for another exciting entry on developing a success mentality for investing. We’ve been covering the ways in which the most successful investors look at the market, and the things they pay attention to when determining risk and value.

With so many players in the stock market, it’s easy to feel lost among a tide of people making major choices on a daily basis. You may be wondering how they all factor into the values of companies, and what their behavior does when it comes to choosing investments for yourself.

Acting On Stock Market Trends

One of the things taught to us early with investing is to be original and pioneering, to act against trends, think outside the box, and beat your own path. If stocks are being snatched up, you should sell, sell, sell, throwing yours to the market to obtain immense profit. If people are selling theirs at a loss, then you should work quick to snatch them up.

There’s value in that behavior, but it’s not a sealed deal for success. Rather, it’s just another investment strategy, and one that is dependent on constantly changing factors that the most successful investors evaluate on their own terms. When it comes to stocks, sometimes it is a good idea to follow trends and stick with the herd.

For example, if a stock is falling, waiting it out before making a purchase may be a good idea. Others will flock to it in the hopes of realising profit, only to see that it continues to fall and gain back a small amount of value. You, on the other hand, decided to wait until the stock hit the bottom, so that your investment gained a considerable return when a portion of the stock’s price returned.

The basic principle at work here is that the market is flexible, and so there are many opportunities that exist beyond what people have come to expect. It’s simply a matter of learning to evaluate performance on your own terms and not by what “common sense” strategy told you.

That’s it for the sixth chapter. We now have one more to go in this series detailing how you can employ effective thinking for making your investments successful! Stay tuned for more next week!

Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 - 2010

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Welcome back. We’re glad you enjoy reading advice on how to invest wisely. Continuing from where we left off in part four of developing the success mentality for investing, we’re going to move towards covering another critical thinking skill that applies to ensuring that your investments are always sensible choices.

It’s Not All About Crunching Numbers

A lot of amateur investors are often told that they should bury their head in the market journals and utilize mathematical formulas for determining successful investment strategies. This is something basic that works, but it can only take you so far. In fact, crunching numbers is only useful when you couple it with what those numbers represent the real world.

Changing values can alert you to opportunities and risks, but they don’t necessarily tell you what those opportunities or risks are. When it comes to making those brilliant choices that the best investors are famous for, it often boils down to evaluating and paying close attention to business practices, employee behavior, and press correspondence.

Pay Attention To The Company Behind The Stock

This mindset is called qualitative evaluation, and it’s basically a matter of inferring changes and deducing market reactions to the things that occur with the key players and participants behind stock-based companies. Very much like being a detective, you have to be willing to forget the numbers and investigate the idiosyncrasies of a company and its behavior.

For example, in 2002, during a Ciena Corporation conference call, Gary Smith, their CEO, was talking. A very festive event, Smith maintained a jubilant attitude regarding the future of his company. However, some individuals recognized Smith’s unusual usage of the term”difficult” and his tone of voice when talking about the economic landscape for telecommunications.

While most basic investors would never have paid attention to this, the shrewd purveyors of fortune knew that this indicated troubled times ahead for the company. Sure enough, almost half of the stocks were sold off only months after the conference, despite optimism.

Always pay attention to what affects your stock directly. Numbers are representations, so you should turn to what they represent and pay attention to the happenings of businesses and the people that run them. This concludes today’s lesson. Don’t leave us however, as we still have more to cover for this series!

Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 - 2010

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In part 3 of developing the success mentality for investing, we took the time to explain how panic can sap your ability to make good decisions and how near-term catalysts play an important role in determining stock value.

These two examples are only a couple of ways in which big-earners and successful investors think. Another good way of staying ahead of the curve and maintaining strong assets is to always stay flexible.

Investing - Establish A Fallback Position

Strong investors make the choice to pay careful attention to market dynamics and to know what’s going on at all times. This doesn’t mean that you should be looking at stocks every second of the day with an eagle eye and biting your nails over every fluctuation.

Rather, it simply means that in order to be certain your investments count, you should maintain an understanding of solid investment backups when your major stocks might take a dive. In other words, establish a fallback position in case your main investments cease to provide.

This plays upon the previous entry’s point in how near-term catalysts can affect stock prices. For example, say you invested in an automotive company. Take Toyota for instance. It’s doing pretty well, all things considered. However, gas isn’t really stabilizing at a price that is cheap, and it could just go up further in the future. Because of this, the sales of vehicles for any company will hurt due to the simple fact that people are driving less and looking at keeping cheap, economical vehicles.

A fallback position in this situation could mean finding a hedge by investing in an oil company. Bloated stock prices to be sure, but you know that if all else fails, people will essentially still need oil, which means you’ll retain the value of your investment.

The basic idea is that you have an escape plan for when things turn sour, or a method of mitigating risk when it builds and causes concern.

Thanks for reading this entry, we hope you have learned more about the successful mindset of the stock market elite. Keep checking back - there’s plenty more to cover on success mentality for investing.

Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 - 2010

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Hey there, we’re glad that you’re back! We’re off to a good start with this series. In part two of success mentality for investing we spoke about how panic is the worst thing that can happen to your state of mind, we’re now going to address future changes and what to look for before buying stocks.

The Philosophy Of Buying And Selling Stocks

It may seem that the classic investment philosophy of “buy low, sell high” is basically the golden standard when it comes to making a profit, but it’s hardly ever that simple. Just because a stock is low doesn’t mean that you should jump at it.

Likewise, if there are tremendously expensive stocks to purchase, then don’t be afraid of considering them when thinking about property to add to your investment portfolio.

It may not make sense at first, but there is very good judgment involved. The most successful investors always look for the looming factors that can suddenly adjust a stock value. In order words, they pay attention to near-term catalysts when considering selling or buying stocks.

It’s true that paying attention to advice telling you to invest for the longest term is very smart. However, there’s wisdom in looking at what’s coming up around the corner and knowing what to expect that could very well significantly adjust the value of the stock in question.

For instance, the stocks for automotive companies have been cheap this year. Especially GM, which is some of the cheapest you can look into. Buying stocks that are the cheapest may seem like a good idea. Not always so! Gas prices have gone up considerably, haven’t they? Factor in the fact that GM has largely focused on producing heavy inefficient SUVs and Trucks to push sales, then you can see how the two collide to produce devastating results. The price of gas is the “near-term catalyst” that you’re looking for.

The basic idea is to look at stock broadly and to know what affects it directly. Evaluating numbers is a great exercise in abstraction, but sometimes the best stock investment strategies involve simply considering obvious aspects of companies and the variables of their respective industries.

Having said all this, we’ve run out of time. Be certain to check back often, as we’re not done yet. Thanks for reading, and come back soon!

Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 - 2010

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In part 1 of success mentality for investing, we covered the basic idea that a good state of mind is perhaps the most important asset you can possess. We will now move forward with this subject and address the ways in which you can improve your thinking and adopt the psychology of investment pros.

The first thing we’ll go over is probably the most obvious mode of behavior you can keep in mind when looking to make solid investment choices. Nonetheless, it’s also the one that’s hardest to master, especially in a field where stock values can suddenly surge or vanish overnight.

Avoid Panic With Your Investments

Basically, when facing the volatility of the stock market, avoid panic. This can’t be stressed enough. Panic is an emotion that destroys your ability to make sound choices and maintain sensible perspective on things. If you allow yourself to be overruled by this dangerous feeling, you’ll end up only making irrational choices that you’ll soon regret.

The stock market is a dangerous place for newcomers, and it’s still something that even the best investors will say that you can never stay comfortable with, because the future is always changing, and what’s valuable today could be gone in an instant tomorrow, and a single wrong choice may very well ruin all your assets.

Because of this, panic is exactly what happens most often to investors when they see the crazy changes of Wall Street (or their stock market of choice). They up liquidating their stocks or rushing to what they see as safe purchases - all without a clear head.

Alright, so we know that panic is a terrible thing. Still, it happens often. That’s natural. What do you do? The solution for panic is to keep it minimal and employ it as a positive factor to motivate you to succeed even harder with investments. In a market where nothing is guaranteed, you never want to rest. Instead, look to make your fear of unemployment or bankruptcy a matter that drives you to achieve your best under any circumstances.

That about covers it for now. We have a lot more to factor into this series, and plenty of ground to cover still. Hopefully you’ve learned a few things with this entry. Stick around and anticipate the next entry of developing the success mentality for investing!

Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 - 2010

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