written by reader Just subscribed Yesterday.

By bustern, August 13, 2014

I am overwhelmed with info/teasers, etc, so I subscribed to the ”teaser interpreter”. If I wanted to ”jump” would buying Travis’s portfolio be a good jump start. I have a hard time picking the good and the bad, and rather than a steep learning curve, would the plunge into his stocks be advised.
If I wanted to ”shadow” /”mirror” a portfolio, any suggestions?

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Travis Johnson, Stock Gumshoe
August 13, 2014 11:02 am

If you just want to jump in and mirror a portfolio, I think you’re honestly better off going with broad index funds. The best reason to buy individual stocks is if you enjoy researching them and following them, or if you’re in the process of learning how to do so (real money focuses the mind) — I’d love to be able to tell you that you can just follow my portfolio moves and you’ll do great, but that’s very likely not true, my portfolio beats the S&P sometimes and trails it sometimes, and it’s built with my personal needs and inclinations in mind.

I think the stocks we write about here are great places to start research, and I hope that we can help you to understand them better and learn some different ways to think about stocks as companies and understand their businesses and why they make money and why a particularly valuation seems high or low — but we’re not going to run a portfolio that works for you personally, and I wouldn’t suggest buying anything that you don’t understand pretty well. When I was starting out I kept adding to an index fund and I read incessantly, reading investor letters from great investors and fund managers as a big part of my education, and then gradually learned more about stocks as I bought very small portions of a bunch of different ideas, reading filings and figuring out how their business worked and why I thought it would grow or not grow, but never putting more into those stocks than I was also adding to my index funds. Many of those stocks were mistakes, particularly early on, but they were learning opportunities as well.

Once you’ve started to buy individual stocks, don’t be afraid to keep your positions VERY SMALL while you build understanding and confidence — commissions are extremely low these days, most investors can build positions slowly without meaningful transaction costs. You’ll learn a lot about yourself and your risk tolerance and the kinds of stocks or business models that appeal to you along the way.

Keep it diversified, keep it simple, don’t buy things you don’t understand pretty well, and don’t rush into anything or be afraid of missing a boat… there are thousands of boats, and most of them spring a leak at least every now and then.

👍 18061
August 13, 2014 1:40 pm

I use them only for trading vehicles, never for “investment”