The Bull Hunters Guide

This time we’re going to talk a little bit about the ups and downs that are inherent in the market. The reason the stock market has such an alluring draw to many people isn’t just because of the potential to make a lot of money at it, but also because of its fast paced nature and it’s sense of adventure. Anyone who plays the market can literally be riding on a huge wave of success one minute and be totally wiped out the next. Everyone hopes to be the person who “got out just in time and made off good” or the person who “got in just in time, right before the spike hit“. This element of strategy and constant fluctuation is one thing that makes investing so enjoyable. Because of that, it’s important to remember that this up and down fluctuation is just an inherent feature of the stock market. When you see stocks wiggling up and down over a week’s time, think nothing of it. Such behavior is perfectly normal, and it’s long term trends that tend to reveal more useful information about a stock’s future projections.

Watch The Big Fluctuations

As hard as it might be to swallow, this advice applies to big fluctuations as well. Many times in the past, and many times in the future as well, the market has and will go through periods of decline known as “slumps“. When these happen, stocks across the entire broad tend to drop in value sharply, and it often takes people totally by surprise. Those who are unprepared for it might begin to panic. They’ll wonder if their long term strategies that seemed so sound yesterday were really so hot after all.

After Every Slump In History…

Changing your long term plans in the face of a slump is always a bad idea. If you want to put money into the market, don’t be afraid to do so. Remember that there’s no where to go from the bottom but up. This isn’t just useless optimism, either. After every slump in history, there’s been a corresponding spike of activity known as a rebound. Those who remain confident and continue on their normal course of activity throughout a slump are those who will be there to reap the rewards of the rebound as soon as it happens. Stick to your guns, and weather the slumps as best you can.

See you next week for part 3 of Basic Investment Strategies.

Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 - 2008

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I have been promising a part 2 to The Bullhunters Guide eBook. My ideas haven’t come to fruition so far. Instead, I have put together a 12 Part Basic Investment Strategies blog series. It will be posted weekly here in The Bullhunters Guide.

This blog entry is the first in the series. The series has been designed from the ground up to help you get more actively involved in the world of investing, so that you can get the most out of your investments. Our approach is to take the amateur investor and slowly introduce him or her to the more sophisticated and advanced concepts that are practiced to great profit by the professional traders in the industry. In other words, this is a tutorial in how to become wealthy! The series will be rather long, and each blog entry will concern itself with one particular technique that you can add to your repertoire of investment knowledge and strategies in order to become a stronger player in the stock market. So, just sit back and relax, and try to take this all in. Ready to start maximizing your earning potential? Then, let’s go!

This time, we’re going to get off to a really basic start and discuss the virtues of diversification. Chances are good that you’ve heard the jargon thrown around on a few television dramas from time to time about how so and so was in dire need of “diversifying his portfolio“. Well, that trope had to come from somewhere.

Diversify Or All Your Eggs In One Basket

Diversification is a rather simple concept that simply refers to the idea of “not putting all your eggs in one basket“. Many beginning investors are often tempted to buy a huge number of shares in a single stock, because the initial cost of sales commissions will usually be quite a bit lower than if they had taken that same amount of money and bought just a few shares in a wide number of stocks. Furthermore, they tend to think that without a substantial number of shares in a stock, their payout will never “amount to anything”.

Try and overcome this way of thinking. The upfront costs might be higher, but what will you do if that one stock you put everything in collapses? It’s happened to many people and it can easily happen to you. Avoid this potential by spreading your funds around in a variety of interests, preferably across a number of different industries. This should help to protect you somewhat against market forces that can sometimes capsize a whole industry worth of stocks and leave you with losses in every single stock in your portfolio.

See you next week for part 2 of Basic Investment Strategies.

Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 - 2008

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I arrived back from Fiji a few weeks ago. Think “stock market” in Fiji and I say: Think again! It just doesn’t add up to the lifestyle over there. For starters, they are way too relaxed. Secondly, money is not something that appears to be too abundant in Fiji. Besides, who wants to think work, while in a tropical island paradise, right?

Jokes aside, I’ve met some beautiful people in Fiji.  21st Century Academy gave me an excuse to travel to Fiji, so I did. Here’s a video I filmed whilst kicking back in the sun. It has absolute nothing to do with the stock market, besides lifestyle.

You can read a more detailed motivational post in The Sean Rasmussen Blog.

Remember The Gamblers Lucky Number 5?

Well, this is the island I was staying on. Malolo Island. These guys played all the great tunes: Clapton, Lionel Ritchie, John Denver, you name them. Of course, they also played amny Fijian tunes.

Here is a video of those great guys I met on Mololo Island in The Manamuca chain of islands.

Again, very little to do with the stock market. But at some stage we need to consolidate and take time out to refresh. These guys know how to reduce the stress levels. Actually, I don’t think they have any stress levels at all!

All the best!

Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 - 2008

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I came home from a 2 week trip to Fiji recently. I was inspired by a story told to me about a Buddhist Monk. It struck me that the 6 inches between our ears is the shortest path any of us have to striking it rich on the Stock Market. It is also the biggest hurdle anyone has to overcome to become truly successful as a trader.

Inspired by my own (good and bad) trading results, I decided to make the Mindset Mastery eBook available. I know that it will help peoples trading results, even though it doesn’t mention trading on the stock market anywhere. You’ll understand once you read it. Trading mentality is far more important than the strategies.

One day, in a beautiful south pacific resort called Malolo Island, my wife read me a story from her book. Hanging in a hammock, suspended between 2 coconut palms, she read out aloud the story of The Gambler. It has a striking resemblance to the thought patterns of some stock market traders I know. The monk wrote of this true story about a friend of his. I’m recalling this story from memory:

The Gamblers Lucky Number 5

One morning a man woke from a very vivid dream. 5 Angels had given him 5 pots of gold. Upon awakening he realized indeed there were no angels, nor any pots of gold.

At breakfast his lovely wife had made him 5 hardboiled eggs on 5 pieces of toast. Puzzled, he picked up the morning paper to discover that it was the 5th of May. Turning to the back page of the paper, he saw that the Ascot (five letters) races, in race number 5, horse number 5 was called “5 Angels“.

The signs were all there. He took the day off work and went to the races with $5,000. He went to bookmaker number 5 and placed it all on horse number 5 to win, in the fifth race. It truly was an omen, indeed. The dream came true. 5 Angels finished the race… in 5th spot!

What Does This Got To Do With The Stock Market?

Well, if I have you a bit dazzled about this topic; here’s my point. In life, including when investing, we get many signs and indicators of “how” or “what” to do. Sometimes we manage to turn, what is bleeding obvious and simple, into an absolute over analyzed mess. I see stock market traders make simple trades into something that would confuse a rocket scientist. It doesn’t have to be hard! The answer is many times right there in front of our noses. Trading mentality requires simplicity.

Horse number 5: “5 Angels“, in race number 5, on the 5th of May came in Fifth. That was the sign! He dreamt it. He was given all the clues but fell down in the end because…. he over-analyzed it. The dream delivered 5’s. Nowhere was there a 1 mentioned!

Gambling On Hermit Crab Number 5 in Fiji

That evening we were still in Fiji.  With the story fresh in our minds, my wife and I entered the Fiji Islands International Hermit Crab Race. It’s a tradition that is done for the tourists and is hilarious. I sponsored Hermit Crab number 5 with $40 (not $50) and out of 6 Crabs, it finished the race… in 5th spot! (I think crab number 6 died. It didn’t move much)

By the way, I was born on the 5th May and 5 is my lucky number… again the Hermit Crab came true to the lucky number: in 5th spot! Of course, I backed it to win.

Happy trading

Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 - 2008

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