How To Invest Profitably In 2018 (Part 1: Stock Market) - Ryan Hildre #Best Education Page #Online Earningth

hey this is Ryan Hildreth and this is

gonna be part one of a three-part series

where I'm gonna show you how I invest my

money and how I formulate my game plan

for building wealth in these particular

investments okay so for this first video

I'm gonna talk about long-term

investments in the stock market okay

and there's many things that go into

long-term investing in the stock market

and I look at primarily a few key

factors of fundamentals of a business

when you're trading stocks fundamentals

don't necessarily mean you're gonna make

money because you're trading a shorter

term timeframe so when I invest in the

stock market it's gonna be anywhere from

five to twenty years that I'm gonna be

holding on to this stock as long as the

fundamentals stick with you know my

criteria so I'm gonna go ahead and hop

on my computer and show you one

particular stock that I invest in and

how I read these fundamentals for this

business and how I continue to add on to

my position as this stock goes up in

price okay so let's go ahead and hop

into my computer and I'm going to show

you part one of this series so let's do

it alright so I want you to take out a

pen and a paper because we're going to

cover one thing today that you will

learn that will help you with longer

term investing okay I'll help you learn

about how to find companies that are

undervalued in the overall market and

how to take advantage of this

opportunity okay again don't don't ever

invest in something you don't understand

okay this particular stock face book is

something that I understand and I have a

set strategy for do I trade this stock I

do trade the options on this stock but I

also have a sizable position in Facebook

for the long term like I plan on holding

this stock for a very very long time as

long as they meet the fundamental

criteria okay so there's one thing I

want to teach you today

but before we get started in that we

have to determine what our objective is

with long term investing are we chasing

yield okay

meaning companies that pay dividends

cash dividends four times you know

quarterly or are we chasing price

appreciation okay there's many stocks

out there actually there's not too many

stocks that pay a great dividend there's

tons of stocks that do pay dividends but

maybe they're like you know half a

percent to two percent which is very

very small you know twenty years back

there was companies that paid well over

five ten percent okay

there still are companies that I own

that do pay upwards of five even ten

percent but you know those types of

companies aren't very prominent in in

today's market okay with today's market

the companies pay the lowest dividends

ever so because I'm young I'm able to

take on more risk and go after stocks

that are going to go up in price okay

for the long term because Facebook okay

and this is a particular stock that

we're looking at today Facebook they do

not pay a dividend so the only way I'm

going to make money on this long-term

investment on Facebook is if the price

continues to go up and then I sell it at

a profit okay

so why did I choose Facebook okay why

did I choose Facebook as a long term

investment first I understand it I'm a

facebook advertiser and I understand

their earnings right I understand how

they increase their revenue they're you

know obviously driving more users onto

their platforms Facebook Instagram

whatsapp messenger right they drive more

users onto those platforms and then they

run advertising right so all these big

companies out there small companies like

me as well pay for advertisements on

these platforms so the more users there

are the more companies pay for

advertising right so that's how they

increase their revenues so I understand

the business

model I do understand the potential

growth for this company Facebook there

is only there is about what 50 million

businesses on Facebook and roughly only

4 million of those businesses are

running ads so I understand the

potential for growth in their earnings

in their revenue so this business is

something that obviously is a little bit

higher risk because it is a tech stock

right it's a tech stock but I look at

this one key fundamental factor okay so

we're gonna this is the the chart of you

know back since 2014 the IPO des in 2012

they've gone nothing but straight up of

course they've had dips and we take

advantage of these opportunities and

I'll show you how to take advantage of

that as well but first I want to teach

you about we're gonna go to let's go to

tool actually one sec let me go to

analyze there we go go to analyze and

we're gonna look at their p/e ratio okay

their price stock price so $203 divided

by their earnings per share gives you

the p/e ratio which is a multiple that I

look at to determine if the company is

undervalued or overvalued okay and if

you go and look at this their earnings

per share is six dollars 81 cents we go

go to their price divided by earnings

ratio p/e ratio their current p/e ratio

is 29 that means for every dollar they

earn okay for every dollar they earned

per share you are paying 29 times what

they actually earn okay so that's the

multiple they're trading at a 29 times

multiple meaning you're willing the

investors that invest today are willing

to pay 29 times what Facebook actually

earns to own the stock okay

Amazon for instance has a p/e ratio of

250 so people are willing to pay 250

times what they actually earn to own

that stock now is that risky right it

what is the level of risk obviously

there's a lower risk in facebook than

owning Amazon right but with high

risk comes higher potential for reward

or higher potential for loss okay so

that's how I analyze these long-term

investments I look at their p/e ratio I

don't look at price because price

doesn't matter you know if Amazon is

trading at 1700 but had a p/e ratio of

two obviously they'd be undervalued

right it doesn't matter about the price

it I look at PE ratio I trade p/e ratio

now why is 29 what is so what is the

market average p/e ratio I guess that's

a better question to ask the market

average p/e ratio right now for the

sp500

is 26 so Facebook is trading over the

average p/e ratio which is okay because

I look at the individual sector this is

a high-risk sector what is the average

p/e ratio of a tech company it's about

35 so people are willing to pay 35 times

for these particular tech companies now

Facebook is trading below that multiple

so I look at this stock as wow there's a

lot of growth potential but people

investors aren't pricing their future

growth into their stock price okay

because their multiples so low the p/e

ratio is so low it's trading at 29

amazon's trading at 250 so obviously

people think that someday amazon is

gonna earn 250 times more than what

they're earning now that's why the price

is so high that's why the p/e ratio is

so high because people are projecting

that growth right but you like well I'll

just talk about me as an investor me as

an investor has to kind of think about

okay am I willing to take that risk okay

do I own Amazon yes I own Amazon as well

do I own more Amazon than Facebook no I

don't because I'm just not willing to

you know risk that much capital in my

portfolio for that growth okay it's just

not feasible for me so that's why I

invest in Facebook I understand the

business model the p/e ratio is lower

than the tech

average p/e ratio which is 35 it's

trading at 29 p/e which makes it a good

investment for me for my portfolio now

you have to depend now you have to look

at you know your risk factor how much

stock you can buy that it all depends on

you and that's for you to decide that's

not for me to decide

I'm not your financial advisor this is

just showing you how I do it and what I

look out for long-term investments I

look at their fundamentals because I

know that what drives stock appreciation

corporate earnings growth okay because

when people when corporations earn more

money they're able to buy back their

shares which increases stock price

because they're not paying dividends so

the only way to increase stock price is

by buying back their shares and more

people obviously investing so that's why

I invest in Facebook how do we determine

now okay now that we understand p/e

ratio price divided by earnings per

share the lower the p/e the lower the

multiple the lower that you're I'm

trying to think of how to say this

I guess the lower you're paying for the

stock the less risk you're paying for

the stock because they're actually

earning more if the p/e is low so let's

go ahead and look at the actual chart

okay how do we determine good entry

points to get into a stock for the long

term I'm not talking about trading here

because trading is a whole different

beast and it's a whole different skill

set okay how do we determine when these

you know dips are coming we can look at

volatility that's the only thing I look

at is volatility so you can go to we can

go to let's see analyze right and we can

go to earnings a week a look at implied

volatility versus historical volatility

volatility means is a measure of fear in

this particular stock okay

implied is the redline implied means how

much predicted fear is in the stock and

the yellow line is

Oracle okay based on the average fear in

the stock you know meaning how many

people are selling this particular stock

so I like to buy when the stock is

dipping and volatility is high implied

volatility is high so when this red line

is higher than the yellow line and

that's the only way I can explain it

right now there's not too much

volatility because the stock price just

keeps going up people aren't people

aren't very fearful so the historical

volatility is a lot higher than implied

and this is when I don't like to buy

because usually you're buying at the top

of the market I only like to buy the

dips when the implied is higher than

this historical and we could look back

at that okay and I buy every every

single dip and I usually I usually buy

these stocks when they are down about 10

percent okay when they're down from 10

percent from the highs I usually buy

unfortunately I didn't catch this dip

because I was in of a lot of call

positions options in the Facebook so I

had to hold those until the stock

rebounded and then I sold at a profit

but you know I would have liked to buy

the actual stock for the long-term on

this dip but I didn't

so whenever the whenever the price dips

like this you have to look at the

volatility and kind of think okay is

this a good price to trade at usually

when the stock dips as well the p/e

ratio goes down because the price is

going down but their earnings are

growing so I hope this video helped you

out I know it could be a little

confusing so if you have to rewind this

video and watch it over again and take

notes on what p/e ratio is go ahead and

do that okay I do have a course on this

as well for you know if you want to

really learn how to trade and invest

long-term in the stock market I have a

course kind of educating on the

fundamentals and on how to you know the

fundamentals of trading as well but I do

want to mention my inner circle I'm

going to be releasing premium content on

the stock market into my inner circle so

if you haven't joined the spots are

filling up I think

I only have like five or six spots left

so that will be the first link in the

description and I hope you enjoyed this

video and I'll see you in the next

investment video which will be on a

totally different type of investment

take care

#Best Education Page #Online Earning

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