The first most disturbing comment is “this time is different”. Oh, how many times that has been said and then refuted again and again.
The second most disturbing comment is “fundamentals don’t matter anymore”. That is another crazy comment shown to be just plain wrong again and again. If something isn’t anchored to any reality, it might as well be classified as voodoo. I’ve yet to hear anyone applying voodoo equity analysis!
Finally, the third most disturbing comment is “Oh, they are young. They have time to lose money.” What?!
Why would anyone want to start their investment career losing money? If someone wants to throw money away, I’ll help them out and take it. Unfortunately, many young “investors” chase the “lottery ticket” kind of stocks. The vast majority lose their investment, which would be better classified as a speculation. The most important thing they lose is something they can never get back – time!
One of the key factors of success in the equity markets is time in the markets. So why not start out an investment career by first establishing a solid base of equities that will grow with time. Then, once the base is started, a few more risky equities can be added. But in the meantime, precious time has been used wisely.
To build a snowman (portfolio), requires rolling and rolling the ball to get it bigger and bigger (cap gains, dividends). Once the ball reaches a certain size, each full turn (year) of the snow ball picks up greater amounts of snow faster. For the guy, screwing around, making snowballs and throwing them, their snowball is not growing. He is just wasting time.
Now get rolling those snowballs and quit screwing around.
Be smart, be well-read, be aware and be successful.
