In this episode, Scott Becker shares advice for investors.
Chapter 1: Who is Scott Becker and what is the main message of this episode?
Chapter 2: Why should investors be cautious about holding individual stocks like Apple and Nvidia?
This is Scott Becker with the Becker Private Equity and Business Podcast. Today's discussion is don't buy individual stocks. So one of the things that I hate is talking to investors, novice investors, amateur investors that think they're brilliant when they hold Apple or Nvidia when it's going up and don't know what to do when it's going down. And again, there is so much of this.
Chapter 3: What examples illustrate the risks of overconfidence in individual stock investments?
Everybody's a genius when the market is going up and brags about their different holdings. For example, my buddy that has made a fortune in SoundHound, he has been incredibly uncommunicative this year. Well, the stock is down. Let me check the number again this year. The stock is down 60% year to date. And all of a sudden, I'm not hearing from my genius friend that's an investor in SoundHound.
Chapter 4: How do market downturns reveal the challenges for individual stock investors?
Chapter 5: Is it ever okay to invest in individual stocks as a speculative hunch?
Similarly, my buddies that are investors in Apple, again, everybody's brilliant, has rode Apple to all-time highs, God bless. Now that it's down 24% year-to-date, I don't hear so much from my buddies from Apple. The reality is, though, the reality is if you want to play some stocks as a hunch, God bless you.
But your core portfolio, unless you're some kind of quantitative genius or somebody could really pick stocks. I don't know anybody that can actually, unless you're an inside trader. I won't mention the name. but he runs 0.72 today. I don't know if he's insider trading. I don't want to get sued. But unless you're an inside trading hedge fund guy, you shouldn't be betting on individual stocks.
You should be investing in index funds. And again, there may be that you're rich enough to have a broad enough portfolio and you could work with one of the big money managers and periodically mimic the S&P and harvest losses and do all those kinds of things. For most of us individual investors, it's more hassle than it's worth, and you can't really duplicate fully the S&P 500.
So the story for today is you're not a genius. Don't invest in individual stocks. Play index funds and have a portfolio you could live with, an allocation you could live with. Billy, don't be a hero. Thank you for listening to the Becker Private Equity and Business Podcast.