#93 - Do Not Make These Investing Mistakes - Transcripts
These are the biggest mistakes that traders make in crypto and stocks. The most important thing you can do is learn from your mistakes. Today, we break down every large mistake we have made in the past, so you can avoid making them in the future. By understanding where you can go wrong. you will gain an edge on the markets moving forward.
these are the biggest mistakes we've ever made
by learning from our mistakes, you can ensure that you become a better investor.
Welcome to the bean pod. This is your place for all things stocks and crypto from beginner tips to expert picks. Use this as fuel for your investing journey because when you're in the know your money will grow.
This episode of the Beanpot sponsored by Khyber swap
swap is a dex and dex aggregator, which is built to facilitate all your defi needs in one single platform
fast, cheap and safe
user experience is Khyber swap sole focus to make everyone's life better. In defi. Welcome to the bean pod. This is Shane a K A, the jolly green investor
and this is josh. The nifty investor
today. We're going to be discussing the biggest mistakes that we've ever made investing. So
we've been investing for awhile and we've made a ton of mistakes. So by learning by the mistakes that we've made, you can ensure that you're a better trader, a better investor and overall grow your portfolio much better than maybe we have in the past. I
mean, look, it's all about learning from your mistakes, right? You know, you come into investing your new, maybe you've only been doing it for a year, maybe two. The best thing you can do is learn from people that have been in the game longer than you and then learn from the mistakes that you make because no one is perfect. Everyone's gonna make mistakes. But the most important thing is to write them down. Don't forget about them and I think that's the one thing people do a lot, You make a mistake and then you just kind of like I sucked up and you forget about it, right? But if you learn from your mistakes, which is what we'll be talking about today, that's how you become a better investor. And
we're gonna, we're gonna give you guys, you know, a lot of what we've done in the past and how these mistakes affected us so that you don't make these mistakes moving forward and it should protect a lot of your wealth. If you missed the very first episode, you'll know that Shane and I have been in the stock game Maybe since like 2010, 2009, I think something around
And then with crypto were both around 2016. Um, so we do have a bit of bit of experience. So we just want to share with you our biggest mistakes so you guys can learn from them and profit along the way.
Yeah, it's all about becoming, we want to, we want to help you become better investors and by sharing are the things that we've done in the past. I think they can really help you out. So make sure you watch this episode to the end and if you like the content like and subscribe, it'll really help us out.
So one of the biggest things, I wish I took a lot more time to learn earlier and it seemed daunting at the time was technical analysis. Um, it just helps identify better opportunities to dollar cost average into projects into stocks when you can understand where support and resistance lies, you know, you're on twitter or you know, doing some research and you see all these indicators and it just seems so daunting. I wish I took more time at the beginning to understand those because it made, it's definitely made me a better trader today and a better investor.
Yeah. So just very basic technical analysis on charts doesn't have to be anything complicated learn, you know, high timeframe support and resistance levels. If that's something that you don't know anything about. We made a specific episode about it which will link at the end of this episode. So check that out, but I agree 100%. I mean it's something that we've really been only getting into the past year maybe even less and I feel like I'm so, so much of a better investor sniping those entries and knowing when to take profits, right entries and exits. So that's definitely a great tip and yeah, a mistake that we didn't learn that sooner as basically full time investor. Yeah,
because sometimes, you know, it's just, oh, just dollar cost average, just dollar cost average. That's great. But there's also, you know, better times to do it and you have, if you can identify something like a double bottom that might be a better entry than when you're sitting at a double top
for sure and you know, piggybacking on technical analysis and the ability to know when to take profits. I would say it's kind of segues into my, one of my biggest mistakes that I've made and that's not taking enough profits and it's, it's, it's the hardest thing to mentally do is take profits on a winning position sometimes because it seems counterintuitive, You see something going up, you think it's going to the moon, you go on social media and everyone says, you know, moon bags, blah blah blah, you know, rocket emojis everywhere and in the 2021 bull run, the one that we just went through, I definitely made the mistake of not taking enough profits. Sure. I took profits and I came out on the other side of it, much better than I did when I went into it. However, if I had the knowledge of technical analysis and knowing how to manage my positions better, I would have taken a lot more profits and my portfolio would be even healthier than it is today. I think that's just one thing I regret, I'm gonna learn from my mistake. I'm not going to dwell on it. I'm just gonna learn from it and apply it to the next bull run.
Yeah, because we definitely could've maximize our profits and our returns had, we have taken some profits in the bull run, you know, that happened to me with marijuana stocks back in the day. Um You know, I put like three bucks in to one of these marijuana companies. I wanted like 70 bucks made a ton of profit. But here's what I did. I ended up putting it into a bunch of other companies and it was like at the peak end up losing a bunch of those profits. So
yeah, again live and learn right? I would say, you know, I watched my crypto portfolio like 15 20 X over a course of six months from you know, early 2021 whatever through the year and into november and you know, it didn't end
20x because I watched it go down, I kept dollar cost averaging even though the charts were pointing that there was much more downside. Um so that would be my one thing is, yeah, manage those positions and take profits. You will never be upset with taking profits.
It really just boils down to greed. You know, like if you are, if you are up by a significant portion, you know, whatever it is that you've set out for your financial journey, Let's say you put in 2000, it goes up to 5000 or 6000, you can take out your original investment the rest of this house money, right? So you can sleep better at night.
Yeah, 100%. And it's difficult, you know, going back to what I was saying about managing positions and taking profits and the hype that you see on social media and that's what I would say is another mistake that I think I make is listening to people on Twitter and listening to people on social media too damn much. Everyone looks like they're a genius on social media and you know, we are also social media creators and we say things and sometimes we're right and sometimes we're wrong, but it's just getting caught up with other people's plans and other people's positions a lot of the time, you know, maybe they're not sharing the trades that they got wrong, they're only going to share the ones they got right. And just because someone has two million followers on twitter doesn't make them a charting expert. You know, they're just drawing green arrows. That Bull run has begun, you know, the Great fifth Great Bull Run has begun those, those clowns on twitter, right? So I think you, your mentality can get diluted and washed away by these million follower influencers. So it's when you come up with a plan and you've done your analysis, try to stick to your, obviously you can take analysis, you know, tips from other
stick to your plan. It's so important because that's how you can just be confident in your own investments in your own plan and if you're, if you're chasing people's trades, it's not gonna work out.
No, and then if somebody has like a million followers depending on what they're pushing like zack Morris yeah he has like 600,000 followers and he's tweeting about like these penny stocks and stuff once he tweets it can like rip like 20% 40%. So if you're not already in early you're kind of screwed and he's probably dumping on you. Um So yeah, it's definitely on the list for me as well as not doing research upon hearing about a specific project or so you know um Was it like wish for example, it's like everybody's hyped the wishes. Oh yeah toss a few bucks in and then like absolutely tanked. So and then I think one of my first investments to was my uncle gave me something like oh this one's gonna do do great. It was like some penny stock And I put $1,000 and it went down to only it's still my portfolio.
That's the one you can't sell right.
It's just like it's always down 99%. It's a
stain, it's there to remind you of your failures so that you don't make the same mistake again.
So that is a huge takeaway. It's if you do hear about something, if you do have a thesis like kind of do your own research. Don't just jump onto it because somebody told you to.
Yeah it's it's aping into projects with minimal research. I would say that's a mistake that a lot of people make um you know even in our discord all the time, you know, we always preach, do your own research just because, you know, you or I like a project doesn't mean that we're, you know, you have to buy this now or you're gonna be poor. No. Were we out we lay out our research for free in our discord, and we say, look, this is why we think it's cool, you can make your own decision. You know, we're not forcing anyone to do anything. We're just saying our opinion and why we think certain projects are good or not
and are investing horizon might be different from what the viewer is. So for example, we might post something, but our thesis is 2 to 3 years out, you know? But in the next couple of weeks it might go down, you know, 20 right. Well, this is such a ship called. It's like, well, yeah, I'm personally picked this project because I see the long term potential of it on
The flip side as well. Sometimes you might say, look, this is a high paced play for example, um you know, these these fan tokens for crypto for soccer, this is a high paced play that could run into the World Cup in November, then I would sell them, but it's not like, okay by these and hold them for 10 years, maybe not. Right? So it's it's you have to look at the time frames. That's a good point. Um one other thing I have here is um, it kind of fits in with what we're just talking about is chasing green candles. I think that's a big mistake that, you know, we've all done it, especially in our younger trading years and people, I see them doing it all the time, people post on social media on twitter most most commonly this is up 15%. People are gonna be like, how to buy, how to, bye, bye now, bye now. Well you should really probably wait for a retracement, right? Don't chase green candles. You should be buying red candles and selling green candles and I think that's a mistake, I've made it for sure. And I see people making all the time.
So I think it's, it's definitely one to keep in mind.
It's fomo, right? You know, you're watching Bitcoin rip right now, the time of recording, it was at like 18,600 it ripped up to about 21,000 plus right now, you can feel the fomo, right, is this the time to jump in? We'll do a little bit ta you're kind of sitting at um resistance may not be the best time to be buying. Um So yeah, it's definitely up there with one of mine as well.
100%. What other, what other mistakes have you made
Not setting a stop loss, you know, let's say you are going in for a swing trade or maybe you just didn't want to lose out on, you know 50% of your trade. You know, you said you put your capital in And then each state just takes down, takes down ticks down and next thing you know you're down 50%. I wish I would have set a stop loss at maybe 15%. So it's like, Alright, you know what, it didn't work out the way it's supposed to the momentum wasn't there? The volume wasn't pouring in instead of losing 50% of your money, you're only losing 15%. You live to win. You live to fight another day.
Yeah. And and that all comes down to I'm going into a position with a plan. So if you buy you know bean stock coin at $10 and you have a thesis behind it and you looked at what this company is doing, you look at the chart and you say I think it's going to reach $50 when it reaches $50 I'll sell a quarter of my position or half my position and then you do that. And then if it goes to 50 and you say if it retraces back down to 20 well then it's not looking so good, I might go back down to 10, I'll sell another half my position or add to it. And you have that plan and then you the hardest part about making is executing, it's easy to make a plan. And this applies to life, not just trading, it's great plans are easy, but it's executing the plan that separates the men from the boys, right? So stick to your plan executed, set those stop losses and take profits at your targets. Um And again, that's a mistake that I've made. I just fomo into things when I was younger and you know, it'll go 10 X. I'm like, oh it's gonna go 100 X. And then it goes back down to zero. And I'm like, for
me, I know it's ridiculous, right? So I think that could tie into another one of ours would be uh ensuring that you're in the right mind space. Like, you know, if you make trades on a day where you haven't really a night where you haven't really slept too much, you've had a few too many beers
trading under the influence. Never recommended.
You'll tend to get a little bit more risky than you probably would for sure. And you can tend to lose that way as well. So
yeah, I can definitely uh think about a couple of times in particular when we've been at the bar and you know, we're just on our phones and looking up, you know, look at the script, this looks great, I'm gonna buy a bunch right now and you know, you just had a few beers, you know, the boys are around, it's like, yeah let's all buy a bunch and then, you know, you wake up and it's like, you know, maybe it goes up right away, but, and then, you know, you kind of forget about it, whatever and then, um, yeah, next thing, you know, you're down 90%. It's happened to me to two times in particular. I've taped into projects while under the influence and both times I've been wrecked. So I would say learn from my mistake and you know, maybe just only trade from your computer at home. Don't trade from your phone or like whatever it is, but you know, we all make mistakes, just learn from that kind of stuff.
Finally, the days where I'm really tired, that's when I make my, my biggest errors, but I've got a good eight hours of sleep. I'm hydrated, I'm exercising. That's why I'm more dialed in and can really figure things out, but I'm tired. I was like, yeah, that's probably good.
Maybe you should get the eight sleep mattress. And if only if you get over a certain sleep score, then you allow yourself to trade, shout out to eight sleep. Not a sponsor of the podcast, but I did buy one and they are phenomenal. Um, okay, so the next one I would say is okay, so you have your plan. We've looked at the charts, we think Bitcoin is going to do this and this and you get into a position and it's going well for you, but then
start doing more and you start looking at other people and then you then you start over analyzing and you start over trading. So I think over analyzing and over trading currently is one of the mistakes that I still make
100% because like there's so much noise out there and you know we're talking on a daily basis about what's going on in the market and one of us might nail a trade. And then while we say oh but what about this jerome Powell speaking, what about the C. P. I. And then you're like oh maybe I should, maybe I should sell it, maybe I should take profits or whatever and it's like and then you make the wrong move and then you look back to your original thesis and you're like I fucking nailed it the first time. Why don't I just just chill with my hypothesis chill with my plan. Don't over trade let my positions run. And that is a mistake that I've still do a lot I think now which I'm trying to get better at is just come up with your plan and let your trades.
I think for us it's a it could be a bit bit different than the viewer or the listener because we are content creators. So we were constantly trying to come up and figure out what is happening because there's a lot of people who are watching and listening and they're on their way to work or they just don't have time to be researching these projects. So we get inundated with so much information. But if you're one of those people who are on twitter frequently or you know reading the news then that is definitely one thing that I struggle with as well and it's it's just too much information.
You know when you're over trading first of all, if you're buying and selling a ton, you're going to spend money on fees depending on which platform you're using. If you're using gas fees on like uni swap or even some centralized exchanges, you don't know. But it adds up,
don't use coin base. That thing is trash.
I've never actually used it.
I think I just swap it was like five K. Or something or something and try to like 200 bucks or 300 bucks or something. Just swapping for Excel. What a joke
even been. It's like you know, it doesn't show you your fees but if you when I did my taxes with through coin li it shows your fees. I was like I wasted a little bit of money on trading but I mean it will take its toll. So like yeah it's best to just come up with your thesis. I think in general do less trading right? Come up with your plans. I'm not saying you know, diamond handhold things forever but just like don't over analyze it and and again it goes back to one of the earlier point and stick with your guns. Stick with your thesis right over analyzing over trading, You end up burning your positions and it's just like, there's a like a funny thing I saw on twitter, it's like, I mean trying to explain to your accountant how you did 78,000 trades this year for a profit of $2.83. And there's the guy just like, it's like that's it, right? Just buying and selling all day every day. It's like for what? And then you're consumed by, it's like your life is consumed hours and for a while, what are you doing it?
The market, the casino that never closes.
That's why it's gonna be successful because people are gamblers, people
love gambling, there's no doubt about
that. But yeah, I'd like to look at more of like a longer time frame or so for example, I saw like a double bottom on Bitcoin right? But it's on the weekly chart. So in theory I should it should be going up from where it is now at least the neckline of 25,000 or so. But if I get so consumed in the daily of what's happening on this ship it and I go down to the four hour chart or whatever and I'm like, oh no, maybe this, it's not gonna happen, but I just think like zooming out, you
can start looking at that five minute shirt bullish bullish divergence on the five minute chart by more cell ship. Yeah it's it's tough sometimes definitely best to keep on the high time frames and not get consumed by the hourly movements. Um And another another point I had is kind of goes back to what we were talking about earlier but in a bit of a different angle is cutting your winners too early and not cutting your losers fast enough. They say that's another thing, it's very difficult and trading to identify your winners and losers quickly and if you're in a if you've cut, if you've entered a trade that becomes a loser and for whatever reason it's not going well don't diamond hand that thing down to zero. And on the flip side even though we always do say take profits, sometimes you can do that to the detriment of your position. So if you buy something and it's at 10 bucks and it goes up to 20 bucks and you sell 75% of it because like yeah I took my profits and then it goes to 100 bucks. Well you just lost out on a lot of potential gains so it's best to you know ease out of winning position slowly. You wanna you know again it goes back to your plan, you bought that position for a reason you have your thesis, take your profits but still leave a significant enough amount in there so that if it keeps running you keep profiting from your good decision.
Yeah. I think sometimes everybody wants everything right now like I want to put 1 to 10-K. And I want to be 10-K. Tomorrow. Yeah for sure
it's now now now now now world.
Yeah. I just find yeah at least take out your initial investment when it's up X percent.
Yeah let it
ride, let the rest ride then the rest doesn't matter.
And then you know with losers.
know I know you do love a little bit of a bag hold sometimes diamond hands diamond hands over here. But It's you know you can take that loss it does your down 50% take the loss and you can do your analysis on different coins or stocks and get yourself into a more advantageous position rather than writing something down. You know you might as well cut a loss at 50% then write it down to 95% or or to a position where you can't sell it in your portfolio. You know I know it sucks to take a loss but you can take that money say 1000 bucks from 2000 shit you're down 1000 bucks do analysis and some other names. Now you found a great entry. Now your 1000 goes into a chart that's in a good spot rather than one that's just like that and I think a lot of people get married to their investment and it's like no no no I love this coin. I love this company. Well you shouldn't be getting emotional about your investments. So cutting losers. I think sooner rather than later is a mistake that I have learned to do better. But yeah, it's still something that you know for sure mistakes on.
So I think that ties into another really good point is not diversifying. So you know, you could be in a whole sector that is kind of tanking right? And versus cutting your losses in that sector whatever. So This leads me back to, you know, maybe investing only in marijuana back in 2016 or 2015, whatever it was. And you know, venture, the sector's kind of died off. But if you have like 10% in the marijuana industry and then 10% in green energy and 10% in a I like you're more well diversified and you can kind of catch some of those upswings when biden announces some sort of stimulus package. Right? So I think lack of diversification maybe being 90% in crypto or you know, I think it's just best to spread out your investments because you could always find it's even like, I think like kevin O'leary had had like 20 coins or something. But his thesis is Look 90% of these ones could go down to zero, but all it takes is to really good winners and it makes up for all of it. So if you're diversified you have that chance of getting maybe 100 x. On one of them or.
Yeah I think his um I might mess up the numbers but he has an investment thesis exactly what we're talking about. It's no position can be more than 5% of the portfolio and no sector can be more than 10 or 15% of your portfolio. And so when he has a winning position he'll trim that down. So if he has a position that balloons from 5 to 8-10% of his portfolio he'll take profits to his plan and trim that position down back down to 5%. And then reinvest that money into a new position or other positions out of whatever they're smaller. And again if he sticks to that plan that works for him then that's great. So you just have to come up with a plan that works for you and execute the plan.
Exactly yeah so I got another one here would be um like listening to the C. E. O. S. I find they're like the salesperson of the company. So if you're investing in stocks or maybe you're in like some of these low cap mid cap type of stocks the ceo is often gonna be like pounding the table about how good his company is where they're gonna be in the future and all this sh it man they're a salesperson and they're just trying to get you to buy their stock I find don't listen to the C. E. O. S. And what they have to say.
Okay right so don't listen to ceo maybe just look at their quarterly
earnings. Look at the raw data and don't get sold on an idea as to why a company could be good
because everyone's a salesman right? Everyone's trying to sell you something. So yeah I think that's a good that's a good call. It's like Jim Cramer
and that's that's the other one is going to tie into the CNBC like the massive media outlets like so for example my twitter posted and and in the discord every time Jpmorgan releases an article about oh now is the time to buy crypto Sure enough the tanks now is the time to sell crypto now it starts ripping because they're trying to get the mass population to do the opposite so they have exit liquidity right? 100
percent do the opposite of what mass media tells you do the opposite of what you know huge talking heads. Like Jim Cramer tell you because everyone has an agenda and I think that's a good call. For sure. So just you know we try to be as you know again it comes back down to how people present things when we're in the discord were saying look this is why we like this we think it's cool. Check out the website here's what they do. You know Jim Cramer is up there saying this is a buy strong buy buy bye bye. Everyone just like, okay, I'll buy like that's it's just a different way that people present things. That's why we try to be, you know, as neutral as we can say. Look, we like this. This is why we like it here. The website, check it out as opposed to like buy it has had to buy it, buy it now. You're stupid.
My theory is that they have these big conglomerates on the back end paying CNBC to, you know, pitch this narrative to get the retail who have been watching Jim Cramer for 15, 20 years. So they trust him. So then he's saying all these things like perfect, the company's just drawing out all the cash.
Yeah, I think that's a good point. It comes, it comes down, it's just create your own plan and create your own thesis. You can, you know, draw analysis and research from other people. But it all comes down to you create that plan, be confident your plan don't over trade and you know, learn from your mistakes you've made me become a better trader for sure. So those are
like my, the bulk of my mistakes. I
think I've basically covered all the mistakes that I've made in the past continue to make to this day, try to get better on every day. You know, we're always trying to get better again. It's just you make, you're gonna make mistakes, don't be afraid to make mistakes and anything you do in life. It's just learn from your mistakes and you will become a much better investor, especially if you're young and you're just getting into it. You have so much time ahead of you make the mistakes when you're younger and you may be playing with less capital, whatever that when you're older and you're managing more, you can look back and be like, yeah, I remember when I did that now, I'm much smarter. I won't do that again.
So have you guys learned a little bit from our mistakes and you can see where we're coming from And then you won't make these mistakes moving forward after listening or watching this podcast and you can now become a better trader and a better investor. one
100%. It's just, you know, go back, write down some of these things if you may not have made the mistakes because then it might prevent you from doing them in the future. Um, yeah, just, just keep learning, keep learning
and then turn into the next episode.
That one is going to be a banger. All views
expressed by speakers on the bean pod are solely their opinions. You should not treat any opinion expressed on the bean pod as a specific inducement to make a particular investment or follow a specific strategy, but only as an expression of their opinion. This podcast is for informational purposes only