The Truth About WallStreet & Investing

Wow, maybe I am late to the game again; WallStreet! Growing up we all dream of being powerful, wealthy, and famous don't we? We are told that if we try really hard, cross all our T's and dot our I's that we will be successful in life one day. Eventually, we burn through high school and enter the world of academia (hopefully). We take the courses needed to earn our degree, we jump through the hoops, but little by little our dreams fade away. Most of us begin to realize that we are probably not going to achieve fame, or extreme wealth. We usually come to this realization through observation and what we are told by those who surround us. We are eventually reprogrammed to comply to what society tells us we will become. This obviously has to do with which tier of society we stem from.

Eventually a few of us begin to grow frustrated with the status quo and seek alternative methods to acquiring wealth and power. We begin thinking up elaborate plans on how to exit the financial struggle we are trapped in. Some of us try starting a business, we realize that if we have some skill set we can charge those who lack that skill for our services. Done correctly this works but it can be a real grind (in my case this was photography). Even so, a percentage of us settle to work with that and I have no objection to this strategy.

All of that being said, some of us have higher goals, we seek to become Masters of the Universe! The problem is we do not know how to start. Additionally, many of us do not originate from families that have strong financial planning skills. The truth is we are poor, we are not part of the top tier of society and thus we have no idea as to how to go about acquiring wealth through the markets!

In fact to the contrary, our social status limits us from even attempting a successful raid on WallStreet. We have been indoctrinated from childhood by our parents, teachers, and elders to conform. We have been told that WallStreet is too dangerous, that only the wealthy can invest in the stock market, and that if we try we will most likely lose our earnings. We are told to open a simple savings account and earn .4% APY on the pathetic wages we manage to gather after being plundered by life's expenses.

Well, I am here to tell you that all of this is a lie. I mean to a certain degree it is, let me explain. There is a reason why the poor do not usually succeed in the stock market; fear! Human beings are creatures of condition and our condition of poverty leads us to a fear of loss. In turn this fear of loss results in a type of laziness where the individual who seeks out to invest  in the markets doesn't take the time to really investigate and study what he hopes to achieve. The individual enters a room of thieves blindfolded and leaves empty handed.

He didn't do his research, he might think that going online to any number of websites and reading some articles about stocks is research but he is completely wrong! He has fallen victim to WallStreet because he doesn't understand WallStreet. He doesn't understand what investing is or what the stock market represents...

Investing isn't gambling people! This is what separates the successful investors from those who are simply throwing money at a dart board hoping something sticks. Learning to interpret the charts is like reading tea leaves, don't get me wrong, you want to understand the technicalities but by no means should you base your investments simply on the charts or what you read on some backwater websites that claim to be about investing. Investing in the stock market is a lot more complicated, and if the most important factors are omitted you will fail miserably unless you are lucky or in an extremely bullish market.

I am a simple college student but I have come to realize one major flaw in many of the people who venture into the market, they forget that what we are dealing with here are companies, products, and services. These individuals become overwhelmed and quickly join the herd. They hear someone say that this such n' such stock is a good investment and they jump into it without even knowing a bear from a bull.
Or better yet knowing a bull from bullshit. 
 These people end up losing the majority of their funds, return home empty handed, and in turn pass on the myth that WallStreet investing isn't profitable, that it is to risky, and that it is only for the super rich.  Listening to Bloomberg radio, or any other number of investment television programs will most likely NOT make you a better investor! It will only make you a lazy investor, who loses his money in the markets and goes home broke.

The secret to investing is research, and research isn't easy. In fact, research takes time, a lot of it. I would even dare to say that if you do not like reading, and arithmetic, or do not have a good understanding for spreadsheets not to venture into investing just yet, you will most likely fail. This is where the myth of inevitable WallStreet failure comes into play. These people didn't fail because the market is rigged, they failed because of their lack of effort. These are the same people who at the time of the writing of this article are rushing in to buy stocks in Tesla Motors, and medical marijuana.    

In order to be successful in the stock market you must first learn the foundations of investing. I would suggest first learning about corporate finances. I would learn how to read balance sheets, cash flow, and  income statements and quarterly reports.

After that I would move on to learning how to determine the true value of a company, how to spot trends, determining if a company is being under/over valued, and spotting possible competing products. I would also learn how to compare companies to their competitors and risk management. One of the key factors in becoming a successful investor is strategy. If you go in blind and without a the proper understanding of how the companies you are investing in work you will fail. More so, you must keep in mind that you are at the end of the day investing in people, and people are unpredictable, the most you can do is base your movements on past performance.

All of this being said once you begin building your strategy things will start to become easier. Take your time, never rush into a trade without having a plan already formulated, and learn to control your emotions! Do not let fear take you off course. Additionally, never take what you read online at face value, everyday you will come across articles about the companies you are investing in, both bad and good you shouldn't let what you read shake you if you are confident in your predictions. Neither should you invest in a stock just because you read an article that claims they are on an up trend, do your own fucking research.

WallStreet can be a tricky place but you too can be a Master of the Universe, and you do not need to start off with a ton of money! In fact, I started out with only about $400 and now I have a pretty nice portfolio, I must confess however that I have been able to increase the value of my holdings by trading options which is all together a much more complex beast.  For anyone who is wondering though I am Long LLTC, ARMH, & QCOM at the moment I will explain why in another article.

The bottom-line here is that you CAN make money in the markets, and a lot of it! However, that being said it all depends on you. You will need to do the research, you will need to become obsessed with the companies that you own. I have seen so many people who go out and pay thousands of dollars for knowledge that is on the internet for free, individuals that pay hundreds to get the scoop from financial analysts who simply took the time to compile the research. To be honest, human beings are astonishing creatures. Everything you need is at your fingertips so please heed my words and don't spend anything for knowledge unless it is in the form of educational books (ones that aren't trying to sell you something other than understanding the principles).

This is my first post on investing and I hope you enjoyed it. Please do not be afraid to leave a comment or subscribe and share by blog thank you.


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