GMR 185: Investing in Individual Company Stock

If you’re familiar with our 4 Steps to Purposeful Living, then you know that Investing Wisely (Step 4) is the one thing that can accelerate your ability to do more good and fulfill your life purpose. In this episode of Getting Money Right, we’re talking about investing in individual company stock. Should you do it, and if so, what things do you need to take into consideration to keep you from financial harm?

Investing in Individual Company Stock

Pros & Cons

Pros:

Charlie Munger bought somewhere around $240, then bought again around $180… we don’t know exactly what he bought at because he’s only required to say the amount he bought in each quarter, and the price fluctuates a bit in a 3-month period
- This is the first time he’s bought anything new in 6 years
- He only has 5 stocks in his multi-hundred million dollar portfolio
- 20% is now in Alibaba, he really believes in it for the long-term
Monish Paubrai
- Positive on the stock
Ray Dalio
- Positive on China, despite recent regulations that caused the stock to dip
BABA Revenue is $100 Billion Dollars a year
- Profit margin is 20%
- That means $20 Billion a year in profit
It’s a growing company with stable profit margins

Cons

Risk of losing it all - only invest what you can afford to lose
Takes time to research and learn about individual companies
It can be an emotional rollercoaster if your motivation is wrong - greed and an unhealthy desire to get rich

Remember the Fundamentals:

Spend on Purpose
Save Before You Spend
Increase Margin
Invest Wisely

Invest Wisely

15% of your income into retirement accounts (tax advantage)
- Index Funds (diversified)
- Low-Cost Mutual Funds or ETF’s
Property (real-estate)
Play money (less than 10% of portfolio)
- Individual stock investing
- Crypto