The Investing for Beginners Podcast - Your Path to Financial Freedom

IFB319: Cutting Losses: A Guide to Exiting Bad Investments

Dec 7, 2023

34:26

Snipd AI

In this episode, the hosts answer listener questions on spin offs and quitting bad investments. They discuss the impact of market fluctuations, the hidden potentials of spin offs, and signs that indicate it's time to sell. They also explore growth industries like EV, AI, and Internet Security, and share personal investing tales.

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Quick takeaways

It is important to approach investing with an owner's mentality and focus on the fundamentals of the business to determine if investments have potential.

Understanding the specifics of a stock spinoff and evaluating the potential of the new company are key factors in determining whether to hold or sell shares.

Deep dives

Determining when to sell bad investments

If you already know that your investments are bad, it is wise to sell instead of holding on to them and waiting for a rebound. Taking a loss can be difficult, but it is important to approach investing with an owner's mentality rather than a gambler's mentality. Focus on the fundamentals of the business, such as revenue growth, profitability, and return on investment capital, to determine if the investments have potential. Be cautious of emotional biases and consider cutting your losses if a company is not performing well.

Introduction

3min

Answering Listener Questions on Investing Strategies and Tracking Investments

4min

Reacting to Market Performance and Evaluating Company Fundamentals

3min

Differentiating Between Bad Businesses and Bad Investments

5min

Spinoffs in Investing

6min

Analyzing Financial Metrics for Investment Decisions

9min

Diversifying High-Growth Stocks and Investing in Disruptive Industries

7min

Exploring Potential Businesses, Fraud in Crypto, and an Invitation for Listener Input

3min

Welcome to the 319th episode of "The Investing For Beginners Podcast"! I'm Dave, and with me as always, is Andrew. Today we're diving into reader's questions on spin offs and when to quit an investment experiencing losses. With expert insight into the hidden potentials of spin offs and the crucial signs that indicate if it's time to sell, join us as we explore these key investing challenges. We'll also be throwing light on assessing growth industries like EV, AI, and Internet Security, and sharing some personal tales from our investing journey. Let's settle into an exciting episode, and as always, we welcome your thoughts on these topics.

02:12 Market fluctuations affect short-term company performance. Long-term performance is determined by financials. Difficulty assessing company without ticker symbol. Possible sector impact not ruled out.

05:27 Fundamentals performing, profitable business or cut bait.

08:22 Explanation: Stock spinoffs can vary in terms.

10:55 Spin-offs can unlock great business potential.

14:16 Changes in financials: margins, income, metrics. Watch for payoffs or gradual declines.

15:38 ROIC trend determines company success over time.

20:06 High growth stocks need different portfolio mix.

22:58 Infrastructure's necessity, winners uncertain, growth uncertainty.

26:07 AI industry, internet security - my two.

For more insight like this into investing and stock selection for beginners, visit stockmarketpdf.com

Questions, send them to newsletter@einvestingforbeginners.com

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The Investing for Beginners Podcast - Your Path to Financial Freedom

IFB319: Cutting Losses: A Guide to Exiting Bad Investments