What is Your Best Mindset?
It’s a website that teaches people about different approaches to the market, and founder Jim Brown uses three different mindsets as examples.
“Let’s say that three people are investing in the same stock — Disney, for example — there is an ‘understanding mindset,’ which understands the fundamentals and the pros and cons of the investment. A ‘parody mindset’ is based on information that they’ve seen but that is not fully understood. Then there is a mindset based on ‘hope’ but is less about rationalism and more about fantasy. Each one of these mindsets comes with a unique way of analyzing whether this Disney stock is worth investing in. All of this is to say that ‘understanding the way that you approach the market is important.’”
The characteristics of a successful investor comes down to three things as well. The first characteristic is patience, the second is dispassion (not being subject to fears of missing out) and the third is diligence.
How do you find your best mindset?
The clearandconfidentinvesting.com website is where you can find Brown’s investment tips. Brown calls himself a translator of financial markets and explains what something like the Dow falling 400 points might mean for the average American. Brown said that the average American shouldn’t sweat something like that kind of fall in value because the day-to-day fluctuation is less important than long-term trends. “I really wouldn’t even focus on it,” Brown said. “I personally don’t even focus on it.”
Where does the bulk of Brown’s market advice go?
Brown clarified that he is not an investment advisor. What he does is teaches people different investment strategies, and then they go and consult with their investment advisors or just make their own decisions. As far as strategies go, Brown gives advice on CDs, stocks and funds.
Are millennials missing out in the market?
Brown does not believe that millennials are exactly missing out on investing in the market. “The most important thing that millennials can do right now,” according to Brown, “is investing in themselves and their own education … investing in their own knowledge and where to put that cash [not now but] in time.” Should you invest in your career, or your skills or in the financial market? These are some of the questions that Brown said he feels millennials should be concerning themselves with.
These days, Brown says, people don’t really “care about their investments per se. What they really care about is how much cash they can generate while they are holding the investment and when they sell the investment.” He said he likes to think of himself as translating complicated wisdom into simple concepts to help investors be successful. For example, if there is a divergence between revenue and cash-flow generation, that is a sign that something could be wrong with the company. A last piece of advice from Brown: Look for operating cash flow generated by the company you are investing in, it is a critically important factor.
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