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Investing Quotes: The best investing quotes for 2017 [Easy to read infographic] Buffet, Graham + More.

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There are hundreds of finance and investing quotes scattered across the web. 

Some are aimed at sucking investors in to 'get rich quick' schemes and investment 'strategies', but the best investment quotes come from the most successful investors.

​Warren Buffett, Peter Lynch, Benjamin Graham and more all made their fortune on the stock market through patient and prudent investing.

​Below are the 11 investing and finance quotes you need to remember in 2017, from personal development to investment strategy.

Enjoy, and don't forget to spread the knowledge by sharing with your friends.

Just click one of the buttons below - it takes 5seconds :)!​

Inspiring list of investing quotes! #Motivated #Investing #Dividend #Growth

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Lewys – FrugalStudent

Tesla Stock: What every investor should learn from its rise.

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I hate Tesla stock.

Tesla embodies the contradiction to every investing rule I follow.

It has no basis in Value Investing or Dividend Investing.

BUT, I’m not here to launch another attack on Tesla stock fundamentals. That’s been done a hundred times over. Yet, with every negative article I read the stock price creeps higher and higher. Defying gravity, fundamentals and, in my opinion, common sense.

To be honest, I’m so tired of reading ‘experienced’ investors countless articles lamenting the stock and recommending people sell or short.

They all failed to see this gravity defying rise;

7/07/2017 - Down 5% on concerns surrounding shipments (surprise surprise) but still up massively

Have people really forgotten how the stock market works?

The purpose of this article is to outline an important lesson everyone, the bulls and the bears, can learn from Tesla’s continued rise.

I would never buy Tesla at anywhere near the levels the shares have ever traded at. Yet, if I had bought shares when my friends did I’d be close to doubling my money right now.

Why does this rise defy logic?

  • The company burns cash like no tomorrow
  • New shares are consistently being issued (Meaning you own less of the company as a shareholder)
  • ​Reports appear to emphasize cars shipped as performance indicator (A sure sign of poor financials)
  • Negative earnings

For a rehash of the countless bearish (and somewhat tiring by now) articles check this SeekingAlpha feed;

https://seekingalpha.com/symbol/TSLA?s=tsla

WHY do Tesla shares keep rising - despite poor performance - and what can we learn from this?

Could it be that all of the bearish articles based on the company’s performance and fundamentals is wrong?

Nope.

But most authors have neglected a very simple yet easy to forget rule. 

The market, ultimately, works on supply and demand.

The more the demand for a stock, regardless of earnings and performance, the more the stock will rise and people LOVE Tesla shares.

You see, Tesla isn’t considered a car manufacturer by the market. It’s considered a tech stock, and tech stocks love to bubble!

Rewind to 1999 and the Tech Bubble will tell you how crazy company valuations can get, and how the bubble will eventually burst.

Tech Crash of 1999 - The price of ignoring fundamentals and buying into hype.

THIS SHOULD BE A WARNING: Poorly performing companies' stocks will keep rising as long as people keep buying.

Tesla isn't measured by its financial performance. It's measured by the hype its fans manage to generate, the personality cult surrounding Elon Musk and the visions of a new world he propagates. 

Elon Musk is hailed as a genius, a pioneer and a great of the twenty first century.

(rightly so I'd say).

But this is the problem.

Even if people don’t believe in Tesla’s stock and performance they believe in Musk.

So what's the lesson?

1. The Stock Market works on supply and demand and not on the fundamentals of stocks.

2. Poorly performing stocks will continue to rise as long as there is investor demand for the stock.

3. Eventually demand will run out and the bubble will burst, but only fools need guess when.​

How can I take advantage of this?

​Here's the EXCITING bit.

Just as poorly performing stocks can be pushed higher by hype and anticipation - Some stocks that are performing well can get pushed lower by negativity and short-term pressures.

Here's an example of some negativity I took advantage of;

In Mid 2016, Flower Foods was coming under increased pressure due to a lawsuit it was facing.

This lawsuit had no effect on the company's fundamentals nor its performance.​

Investors just got spooked. - The stock price dropped from around $18 to close to $14.

I swooped in, bought some shares, got paid some dividends and by the new year everything was sorted and the stock price rose.​

Final Word

The Stock Market is a weird and wonderful place.

Poorly performing stocks (in terms of fundamentals) can continue to rise whilst stocks that are performing well, or just hitting small blips, can fall significantly.

Sure, Musk talks the talk when it comes to Tesla.

His vision is romantic, futuristic and frankly - EXCITING. This helps breed demand.

But, these are not reasons to invest in a stock. One should invest based on current stock fundamentals ​and not for an individual (Musk), hope or a romantic vision.

One should also take advantage of short-term negativity surrounding out of favour stocks that have solid fundamentals.

The intelligent investor should be interested in boring stocks that churn out consistent results year to year, decade to decade, and avoid taking an erratic bet on a company that may be the future.

As always - I don't make a penny from this blog, so a share would really go a long way!

Lewys.​

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What would PM Corbyn mean for the Stock Market?

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A look at two key policies

The Conservatives are looking wobbly and many people have asked what actions they should take in the event that Corbyn becomes Prime Minister within the next two years. 

It's a valid question since we haven't had a Labour government in around 7 Years.​

In this article I’m going to explain what a Labour government would mean for the stock market and how you can take advantage of the volatility it would offer in relation to two key policies;

The £10 minimum wage and Renationalisation of old state monopolies.

There’ll be no partisan political alliance here – I’m going to talk cold hard facts.

I don’t think anyone is convinced by Theresa May’s deal with DUP. Not even her own party. Commanding such a slender majority in the house of commons is bound to have an adverse effect on governing.

We’ve been on a stock market rally since 2009 with the FTSE100 climbing from 5,000 to 7500. Despite Brexit and despite a calamitous result for May & Co.

So, would the market continue to rise with another shock to the system in the form of PM Corbyn or would the house of cards begin to fall?

Who knows, the point of this article isn’t to predict or prophesize over a market collapse. Only a fool would claim to have a crystal ball.

Here I seek to answer these two questions;

i) How do I think the market the stock market would react to proposed Labour government?

ii) How could I take advantage of any volatility?

Firstly a disclaimer, I’m a Labour party member and voted Labour this election, but, I’d be lying if I said I think a Labour government would be a good for the stock market.

Corbyn has, whatever your personal opinion, some policies that would spook the stock market;

  • Raise the minimum wage to £10 an hour (even for 16 year olds)
  • Re-nationalise the old state monopolies
  • Separate retail and investment banking 

​Please note I'm not here to debate the pros and cons of such policies just the effect these would have on the stock market. Nothing more, nothing less.

Copyright: Hasbro

Let’s start this series of articles with the two that I think will have most impact. The £10 minimum wage and Renationalisation of old state monopolies.

How would the market react to Corbyn’s £10 minimum wage?

The £10 minimum wage will almost certainly cause some short to medium term volatility for low-skilled labour intensive businesses.

A company like Whitbread instantly springs to mind.

Whitbread own and operate Premier Inn and Costa Coffee and it’s estimated that the previous minimum wage hike to ‘the living wage’ from £6.70 in 2015 to £7.20 in 2016 (currently £7.50) cost the business around £20million.

If we crudely accept 50p rise cost the business around £20 million a £2.50 rise from current levels would cost the business up to £100 million, maybe even more due to 16 year olds getting a huge hike.

Personally, I think that paying 16 year olds a £10 an hour is a leap too far and will price them out of the employment market. Why hire a 16 year old kid with little experience when you can hire a 25 year old with job history for the same money? It’s an employers market after all.

But we’re not here for my poliical opinons.

How to take advantage

Besides the social effects, such a policy move would see an instant downturn in the stock price of UK-Focused companies such as Whitbread, Next, Tesco and so on.

But, away from being a cause for alarm, I think this would be a great buying opportunity.

I don’t think this policy would have as much as an impact on the long term performance of UK-Focused companies as the stock market may think.

Yes, paying £10 an hour sounds horrible to companies, but they’ll just plough ahead with cost cutting measures and price inflation to make up the difference.

Speak to anyone working for, Tesco for example, and they’ll tell you that they’re over-time is being curbed, staff perks cancelled and pension schemes trimmed in an effort to make up for minnimum wage hikes.

Credit: Asda UK

Asda even scrapped free tea and toast for its workers (a move sure to make Brits furious)

Plus, whether we like it or not, we’re moving towards an autonomous future with the need for staff sure to reduce over time.

So, FrugalStudent says buy such companies, subject to fundamentals, on a dip (if one materialises) under a Corbyn premiership and wait for cost cutting measures to mitigate the effects.

Agree? Then tweet your support!​

@LewysAron says -BUY- Businesses like WTB on the dip if we get a £10 Minimum wage. I AGREE - Here's why:https://goo.gl/eLHAvR

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How would the market react to Renationalising the old state monopolies?

Corbyn has set his sights on the old state monopolies so what does this mean to shareholders of Royal Mail for example?

Royal Mail is top on the hitlist so let’s take a look.

I couldn’t find a direct cost for how much Labour thinks it would cost to renationalise Royal Mail but a recent post by Momentum (credited with much of Corbyn’s success) put the figure, somewhat confusingly at £0.8bn.

£0.8bn? Half would cost £2bn + at today's price.

A figure this low would certainly be alarming for shareholders as it would appear that the government plans to rip them off with Royal Mail’s current market cap standing at over 5x that amount, north of £4bn.

Supporters of the move have clarified that the government would seek to buy back 50% + 1Share, but that still leaves the cost standing at over £2bn.

Most concerning for the remaining 49.9% of investors is that Labour has said that it .would be an end to dividend payments. of nationalised companies once the government takes a grip on the reigns.

Such a move by the government would be certain to spook investors and lead do a drop in the share prices of acquired targets, future targets and even potential targets.

So what would Labour Nationalise? These former state owned monopolies are the current targets;

  • Water companies such as Severn Trent, United Utilities, Pennon Group.
  • Royal Mail 
  • The 'Big 6' energy firms such as Centrica and SSE

​These companies dependant on government franchise contracts could also be at risk;

  • First Group, Stagecoach, Arriva

Credit: Mirror UK.

How to take advantage

FrugalStudent recommends extreme caution when buying into any of the above companies and any potential targets for nationalisation. An end in Dividend Payments would destroy shareholder value and substantially increase the risk of holding the remaining 49.9% of shares.

However, we need to remember that most of the affected companies are ​multinational and they will be left to operate in other markets. For example, Centrica, SSE, StageCoach and First Group all have Europe-wide operations. Despite this, the potential loss of the UK market to government operations would be devastating in most cases.

Long term investors may want to buy in on a dip in the hopes of a return to private ownership in future or expansion in other markets - but anyone doing so would be in for a bumpy ride!

Some more adventurous investors may look to short the stocks of such companies – but that’s not for me!

Wider Effects

I do feel the need to add a cautionary note in regards to the future of other, less obvious, industries which may be in the longer term sight for nationalisation too.

Banking instantly comes to mind.

Although it may be too early to start thinking of the effects on such industries yet, it’s worth baring in mind.

​Corbyn's stances on Defence may also have a negative effect on defence companies such as Lockheed Martin and BAE Systems that I may cover in the next article although I don't invest in such companies for personal reasons.

Summary

In this article I have outlined the effects and the opportunities presented by a £10 minimum wage and the renationalisation of the old state monopolies. This article is neither a case for or against the above policies and focuses soley on the outcome for the shares of companies. There are very real benefits to nationalisation and public ownership is somewhat the norm across Europe.

If you liked this article, please spare a few seconds to share it. I keep this website ad free and make no income from it. It would really go a long way to helping me;

Lewys

FrugalStudent

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By subscribing you will receive my weekly FTSE dividend stock updates along with access to my official UK stock watch list along with early access to my 'Beginner to investor' guide - The most comprehensive guide on all investment options open to British investor.

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FrugalStudent – An Important Update.

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Thank you to all my loyal followers for keeping the faith over the past few month.

You’ve probably noticed that I’ve been very quiet, well, with good reason – I was completing my finals at university and really didn’t have much time to spare at all.

The good news is that I’m all done now and have a whole summer to improve FrugalStudent and help you reach your investing goals.

Over the past few days I’ve had a long and hard think about the direction of FrugalStudent and decided an exciting change is in order.

My blog has become too much of a ‘copy-cat’ for my liking. Don’t get me wrong, I’ve never copyright or plagiarised an article but just google any dividend growth blog and it’ll offer the same style of stock analysis and the same cliched ‘financial freedom’ spiel.

What makes my blog unique is my focus on the UK stock market and helping people living in the UK, especially first time investors, take the first step towards growing a dividend income.

From now on, I’ll be focusing more on researching and writing up on UK stocks and starting a weekly ‘In my inbox’ column.

That’s why I’m inviting you to send your questions and queries to Lewys@frugalstudent.co.uk for my take on the matter.

It could be anything from where to invest that £500, not knowing whether to buy or sell a share, budgeting or whether you should take that loan or not.

I’ll also be talking more about politics and how political events in the UK could have an effect on the stock market. For example, what would a £10 minimum wage do?

Get your question answered – Ask Lewys @ ‘In my inbox’ by E-mailing: Lewys@frugalstudent.co.uk or filling in the form below;

 



In My Inbox. Submit your question below, now.

Analysing shares: How do I know which shares to buy?

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Learning how to value shares and deciding which shares to buy is the toughest part of investing.

Do I buy Tesco, BP, BT or Next? ... The list goes on. You may even be sitting there wondering where to even start!

Unfortunetly, there's no magic formula that will guarantee you pick winning stocks all the time.

But I am going to show you how to identify stocks worthy of investment.

Here is my OFFICAL 10 Point Stock Checklist and the list software which I use to shortlist stocks.

Remember to share this knowledge with friends by clicking the share social media icons!

I'm a full time student and spend hours producing this content - free of charge. I don't run ads on the site to give you the best experience possible. In return, it would be awesome if you could share this content!

Just click below.

Check out @LewysAron 's 10 Point Stock Checklist. Ten things to look at before deciding on whether to buy a stock. Easy and actionable.

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Subscribe to our newsletter

By subscribing you will receive my weekly FTSE dividend stock updates along with access to my official UK stock watch list along with early access to my 'Beginner to investor' guide - The most comprehensive guide on all investment options open to British investor.

 

 

Binary trading scam: My epic takedown of binary trading

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I hate binary trading – I even go as far as to call binary trading a scam

Now you may be thinking ‘binary trading scam?’ isn’t that going a bit far?

Well the dictionary definition of scam is;

‘A dishonest scheme’

And, I certainly feel that Binary trading is presented in a very dishonest way.

Just look at these messages that  pop up in my Twitter and Facebook inbox

Dishonest!

In this article I’m going to explain to you what binary trading is, why it’s a fool’s game and how dividend investing (the investing I advocate) is different.

Continue Reading

What share to buy?

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The first question I always get asked by newbie investors is focused around what share to buy.

Through some seminars I’ve held at university recently I’ve had the opportunity to gain valuable insight into how fellow students invest and what makes a share a buy for them.

But one thing has become clear – the last question newbie investors should ask is ‘what share to buy’. Continue Reading