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Hi everyone, this is Dan Thompson. Welcome to another wise money tools video. Glad you could join me today. You know, in the last video, we were talking about some comments on a post put on Facebook. And the advice or non advice that was given after that. And just as I finished up those videos, I started reading through it again and there were some more comments. And I just thought, Man, I've really got to talk about this. Now, for those who don't recall, maybe didn't see the last video, you can go back and watch it. What happened was, I think a second level person in my facebook group had this question. And the question was, for those of you who have stocks and bonds, do you use an investment advisor or self-invest in an index? He goes on to say, we have an account with Stiefel, but I'm not overly impressed with the performance we've seen and the fees that they charge. Any recommendations anyway, then the recommendation started coming. A lot of that I call barbershop advice. And I'm not trying to disparage barbers. It's just that's kind of the proverbial thing, you know, Oh, I got the stock tip from my barber. Anyway, go back and revisit last week's video if you want to hear some of the other comments and what was said there? Well, the next couple of comments were really telling one of them read like this. He said, I managed my own investments in Robin Hood. You can do fee free trading there. If you're interested let me know I'll give you a referral code. That gives you both you and me some free stock. Okay. Well, Robin Hood, actually it is a pretty good place to trade. It's a pretty good place to trade here that again, it's a pretty good place to trade. It's not a very good place to learn how to trade or to learn how to invest is not very many places that can teach you that. I think the guy who had the original post was trying to either turn it all over to someone else, or learn how to do it himself. If I can hear what he's saying, because he says, back to this guy he says, Well, I already run Robinhood. So in other words, he's already got the app. But I don't trust myself to run my entire portfolio yet on my own. Are you actively trading or park on some index funds? Now, not quite sure what he was saying. I think I get what he was asking there. But what's interesting is he's kind of self-aware. He knows he's just pushing some keys and some buttons and buying stocks. But he has no confidence that he's doing it right or even knowing what he's doing, and so he's reaching out to somebody, you know, what do you guys do? How do you guys know what you're doing? Sadly, not everyone's all that self-aware. They think if they pull the trigger on some stock, and it does well, now they're expert traders. And again, we saw this so much through the 90s and the early 2000s. Because it was just hard not to do well, if you push that button. So this guy's answer to him was priceless. And it's exactly to my point. He says, basically, I do a little of both, mostly indexes for my parked stuff. But I do invest in companies that come and go in value. That come and go in value. That's the key word here. For example, I had some Tesla shares I bought during the dip, and then sold during that insane not logical price jumped last month. Okay, so kind of laugh at that because we got to unpack this answer. So first off buying indexes, I get it. For many, this is where they should probably be investing, rather than being in managed mutual funds and paying high fees. However, this really isn't investing, it's more speculating. It's hoping the market will continue to go up. It's kind of betting on America, which again, is all good. But it's not really investing and investing is more when you understand what you're doing, why you're doing and you're doing it with purpose. See, these guys really have no reason to be investing, no logical explanation then other than, you know, isn't just what you're supposed to do with your money. Right? So now, by the way, what I think he means by Park stuff, I think he means his long term money, or maybe money that he doesn't necessarily want to put out there to lose. Even though that hasn't worked out so well in some of these major recessions but I'd be curious what long term is to to this person? I always wonder if these people have been taught or even thought about compounding periods. And the effect negative compounding has on their losses. Well, then the part that really got to me was his comment about Tesla. Now, I personally like Tesla as a company, I love the technology. I love the innovation. I love the cutting edge. It's a fun company to watch. However, in nearly any evaluation model that you use that you can find out there, you can think that Tesla is ever what is considered a value play or a value stock. Last year alone, it lost $5 a share, which means it has no earnings, right has no dividends, has no revenue, and it sells for $800 a share at least at this current time of this video. So you pay $800 a share to lose $5 and for some reason that stock keeps going up and up and up. Okay? For Tesla, I kind of get it. It's all on the hope that they're gonna do something incredible. Discover something, they're gonna explode their profits and their earnings and some days that those, the revenue is gonna catch up to the stock price. At least that's the hope. And that can take years and years, if not decades, who knows? They probably can happen maybe will happen. But for now, you can't give me an evaluation model that shows Tesla is in any way shape or form of value buy. So just by this guy's comment, I realize he's technically not a value investor. Anyway, he says I buy companies that come and go in and out of value. And then it goes on and buys Tesla on the depth. Alright. Tesla on dip is more of a technical way of trading, but it's certainly not value. So and again, be I hate to reiterate this, but Tesla has no intrinsic value. So how did he value it, it's really hard to value a company that has no earnings. In fact, the value stock or the value stocks that are out there, it's where their earnings are better than their current stock price is selling for. So in other words, you have a really good chance of getting your money back out of that stock in a very short period of time because of the earnings. The truth is, all this guy did was roll the dice on a technical dip. And now he thinks he's a value investor. So as a comparison, you got to look at a true value investor and even Buffett doesn't necessarily like this but Buffett is really a value investor. He's not buying on dips of value investors when you buy a stock, that may be worth $50 a share, but you're buying at $25 a share. And it has enough earnings to get all your money back in say 7 to 10 year period of time, just through it's earnings. That's just kind of a cursory overview of what value is. And again, Tesla was not value. And that's why I say oftentimes, this is barber shop advice. Okay, then he ends with this last comment. He says, not logical price jump last month, well, not logical. I'm not sure what is logical about Tesla right now, but it's certainly nothing logical in the value arena. So in addition, one thing to know that when Buffett wants to buy a company, he wants to buy it so that he never has to sell it. In fact, he says the best time to sell is never but for different reasons than a typical Wall Street advisor would have. See a Wall Street adviser basically says not to sell with their fingers crossed, hoping that the markets gonna come back. Buffett doesn't sell because he knows the company so intimately. He knows the management, the revenues, the products they build, the cash flow, the balance sheets, I mean, knows everything about that company before he buys it. And if he's gonna buy one stock, he treats it as if he's gonna buy the whole company. And he won't buy a company for one day, if he doesn't think he can hold it for 10 years. That's really how you become a wonderful investor. He's virtually assured that unless something significantly changes within the company, he's gonna make money. And that's why he wants to just hold on to that company forever. Why not keep holding companies that are making your money. And again, the only time he would sell is if the story changes dramatically, and it's no longer the same company that he studied, understood and originally bought. The guy who bought Tesla, he was speculating. He was rolling the dice got lucky. And now he's able to give financial advice to his friends. He came out, okay, because that's really the kind of market we're in. We're in that greater fool market, the greater fool seems to be just around the corner. And you don't have to do much homework right now. You can listen to your barber, and maybe you'll do okay. The point is, if you're not going to learn to invest, then please don't take advice from Facebook comments. I guess Facebook is becoming the new barber shop where advice is free and worth about that much too. I'd love to see anybody that's interested become great investors. But if you don't want to take the time and educate yourself, there are ways to get compounded returns without the worry, without the risk, without the heartburn, without spending hours and hours looking at spreadsheets. In fact, with the accelerated leveraging strategies and having safe money, you can oftentimes do better than risk investments and not miss out on compounding. And if you do it right, you'll even have some tax advantages. Well, that's it for this Facebook post. It was sure interesting to say the least. If you have any comments, please make sure you put them below if you have any questions, you want to shoot them to questions at wise money tools.com, answer them just as quick as I can. Don't forget to subscribe, and don't miss a video. Got a lot of good stuff coming up. If you ever want to have a conversation about your situation. You can also click on the time trade link below and we can talk about what's going on in your life. Well that's it for this video. Until next time, take care.