I had a discussion in a Facebook group with a prominent financial copywriter yesterday who told me in order to be successful in my relatively new business direction, I had to adopt a right wing slant.
And it got me thinking.
As a financial publisher, I subscribe to a bazillion investing newsletters and study every promotion very carefully.
I’ve done this for years – consuming everything I could get my hands on about all types of investments.
You name it, I’ve probably studied it.
When I started to develop and market my own premium investment newsletters, CannaVestor Lab and Real Passive Profits, I began carefully examining the way other premium newsletters are marketed by my competitors.
In a word it’s… gross.
The major themes seem to (always) be…
Are you prepared for the coming crash?
The Fed and the Deep State are coming for your 401k!
Your retirement isn’t safe!
And lately, they are really exploiting the political divide in the US with most of these publications vilifying liberal ideals and praising conservative ones.
And then of course when you click through to the sales letter or video, you have to sit through some guy (it’s always a guy) yammering on about…
The “secret” he’s about to reveal in a moment…
4 or 5 iterations of “imagine what your life will be like when…”
And the ever-present words… if you haven’t had [insert any desired result here] yet, it’s not your fault!
I can’t stand that type of marketing and I bet you can’t either.
It’s so formulaic and smarmy.
But guess what?
You may hate being marketed to this way but this type of marketing IS 100% YOUR FAULT.
Yep. All yours.
Because that’s the only way most people buy online.
The countdown timers, disappearing offers, and all that other stuff we can’t stand is there for one reason only… to try to move the prospect (you) to take action.
Because the truth is that you don’t push the button to buy unless you have a darn good reason to.
And that motivator is usually a deadline.
Or a takeaway of some sort.
It’s all in the book Influence: Science and Practice by Robert Cialdini.
If you have a copy or can get access to one, you’ll read all about scarcity tactics on page 231.
So, why am I telling you all this?
Because I don’t want to market this way just as much as you don’t want to be marketed to this way.
I want my financial publishing firm to reflect who I am…
I don’t want to give my content a pessimistic, hardcore conservative (InfoWars or Breitbart) slant because that’s not who I am.
And I have no desire to engage with let alone serve the type of people that content attracts.
So, here’s my promise to you.
I promise to keep honoring my values and do my best to keep the weird marketing tactics to a minimum.
when I made the decision to pivot to financial publishing, one of my business advisors, Peter Shallard, told me that all a business really needs to be successful is 1,000 happy, engaged, customers.
So, I’m all about getting my 1,000.
Will you be one of them?
So, the stock market is in a sell off.
Or a correction.
Or a panic.
Or a downturn.
Or being manipulated by the Deep State.
It depends who you’re listening to, I suppose.
This morning the DOW (DJIA) hit a low of 23,778 which is a 10.7% drop since January 26th.
The technical definition of a correction is a sustained 10% drop.
We’ve since regained 733 points to put us at 24,511 representing a 7.9% correction.
What’s Causing This
A few things.
1. Inflation fears.
2. Interest rate fears.
3. Automated trading selling off as stop losses are hit.
Should I Be Worried?
Markets correct and sell off occasionally.
It’s the nature of the beast.
If you’re a short term investor – day trader or swing trader – then this is probably causing some heartburn.
If you’re positioned like we are at the Investor Insights, it’s not that big a deal.
We focus on alternative investments across 4 categories that are fairly insulated from the public markets.
Investments in PRIVATE companies mainly on a revenue share or interest-paying basis.
Investments in PRIVATE debt held by consumers and private companies.
Investments in microcap and nanocap cannabis stocks and exchange-traded debt securities.
Investments in PRIVATE syndicates, note funds, and eREITs.
Across all of these categories, there is only one asset class we invest in that’s effected by the market and that’s pot stocks.
And that portfolio is currently showing an average gain of 95.63%.
Our crowdfunded revenue share investments are still paying us 14%.
Our private loans are still paying us 8%.
And the opportunity I shared in the inaugural issue of Real Passive Profits, my premium passive real estate investment newsletter, is still paying 12%.
So, I’m not worried.
When I hear about people panicking and selling, I remember a few Warren Buffett quotes that have served me well over the years…
“Be fearful when others are greedy and greedy when others are fearful.”
Which is the value investor’s mantra.
That’s when they start scouring the market buying up blue chips at deep discounts and holding them forever for steady gains and dividends.
“The stock market is a device for transferring money from the impatient to the patient.”
I see so many impatient people selling and announcing they will get back in.
I’m not even sure what that’s about but it probably went something like this:
1. They bought a stock.
2. It went up and they had an unrealized gain.
3. It went down and they sold and had a realized loss.
4. Now that they have lost money, they will look for an opportunity to get back in on the way up.
That makes no sense unless their job is to make it super easy for the patient investors to swoop in and lock up those future gains.
The way I manage the only part of our portfolio that has market exposure, our cannabis stocks, is this…
1. We bought a stock. (23 of them, actually)
2. The portfolio went up and we had unrealized gains.
3. I identified 7 stocks that had gains of 200%+ and I sold enough shares to cover our initial investment. (We booked a realized gain of 300.67% and $4,273.27 in cash)
4. Now that we have eliminated our risk, we hold long-term and enjoy the ride back up.
And a lot less stressful.
Don’t panic and let the other guy win.
I started reading a new book this week, The Intelligent Investor by Benjamin Graham.
Warren Buffett calls it hands down the best book he’s ever read on value investing and he considered Graham his mentor.
It’s a beast of a book – over 600 pages including the endnotes and appendices!
I am a little concerned that I may not finish it before the next Ice Age but I’m even more concerned that I’ll run out of highlighter pens.
Graham had a set of five core principles about investing that are just as valid today as they were back in his day.
Three are really resonating with me…
1. A stock is not just a ticker symbol or an electronic blip; it is an ownership interest in an actual business, with an underlying value that does not depend on its share price.
2. The market is a pendulum that forever swings between unsustainable optimism (which makes stocks too expensive) and unjustified pessimism (which makes them too cheap). The intelligent investor is a realist who sells to optimists and buys from pessimists.
3. The secret to your financial success is within yourself. If you become a critical thinker who takes no Wall Street “fact” on faith, and you invest with patient confidence, you can take steady advantage of even the worst bear markets. By developing your discipline and courage, you can refuse to let other people’s mood swings govern your financial destiny. In the end, how your investments behave is much less important than how you behave.
Patient Confidence is my new mantra!
It’s applicable to us because I am in a couple of markets with HUGE volatility – cryptos and cannabis – and both of these markets have experienced unsustainable optimism AND unjustified pessimism in just the last two weeks.
Staying the course and maintaining confidence in a company’s stock is a test of patience.
I’ve been investing a long time and occasionally I’ve exited trades much too soon because I lost confidence – losing out on lots of profits as a result.
I’ve also stayed in too long sometimes, not realizing profits when they were there for the taking.
A great recent example is Kush Bottles (OTC: KSHB) a company we hold in the CannaVestor Lab portfolio.
I first bought KSHB on November 15, 2016 at $3.96 a share. It didn’t do what I expected it to do and, even though I knew this company would perform well, I chickened out and sold it on May 15, 2017 when it dropped to $2.55 a share.
But I kept thinking about it.
And researching it.
And even as it kept going down I just knew that it would turn around at some point.
So I bought back in at $1.91 a share on October 16, 2017 and the stock is trading today at $6.20 a share – up 225%.
In that trade, even though I lost confidence in my ability to cope with a “loss”, I never lost confidence in the company.
I practiced patient confidence in that scenario and was rewarded.
So, patience and confidence are two things I work on a lot.
What about you?
They say that success leaves clues.
If that’s true, and I believe it is, more traders should pay attention to what Goldman Sachs’ trading desk does.
This is from their 2016 annual report.
29 trading days with a loss.
222 trading days with a gain.
19 of those posting DAILY gains in excess of $100 million.
I decided to dig a little deeper into their methodology and discovered that most of their trading is execution trading and/or market making.
So, that’s just marking up orders that clients – institutional and individual – call in.
But that’s not all of it.
And 222 days of #winning is pretty impressive.