Ep.42: Investor Tips: Why this Extremely Rich and Successful Stock Trader DOESN'T Trade for Other People

Why don’t you trade for other people?

You can manage the risk, but you can’t manage the people’s emotions. For Marvin, it will always be better if they trade for themselves. If people can’t manage their funds themselves, then they’re better off putting it in a mutual fund, that way it’s regulated as well.

Marvin thinks that investing your money is your responsibility. No one will take care of your money more than you. He tried to trade for his relatives and friends once. During take profits, they would agree immediately. But when it comes to cutting losses, they don’t want to. When it comes to trading, people have different thresholds and mechanisms to cause them to buy and sell.

For example, a stock might be down by 50%. Private investors with no other responsibilities can easily take advantage of it. They can buy it at that price, wait a few years for it to break even, then wait a few more years for it to double. Your patience will be worth it. Private investors have the advantage of being able to position into something and wait even if it doesn't perform.

The problem with mutual funds is that this can’t happen. If they don't perform in one year, then no one will invest in it anymore. Another problem is that it becomes a self-fulfilling prophecy wherein when the market is down, even if the fund managers want to stay but people are withdrawing their funds, then they have to sell. 

Marvin hammers into people the importance of dividends. As long as the stock has dividends, you will still get something that beats inflation even after 7 years of stagnancy. And when you buy these stocks low, then you’ll get a better rate of return from it.

How many times in a month do you get the question “Marvin can you trade for me?”

Marvin has been focusing on Youtube, so most of the time, he isn’t able to see or reply to many messages. The only time when he gets to reply to messages is when he’s holding his phone and a message suddenly pops up. However, he doesn't always have his phone on hand.

Marvin believes that the name of the game is not to consume but to create. 

One of the things that have been very insightful for me was reading the book Deep Work by Cal Newport. In that book, he mentioned that he doesn’t allow shallow interruptions to disrupt him in his deep work. He’s a professor. He has a Ph.D. and he teaches and writes a couple of research papers. He doesn't do a lot of messaging such as Facebook Messenger and SMS, he also doesn't look at his emails a lot. I believe this is something that Marvin does without realizing it. He’s been eliminating these distractions to keep focused when he works.

Marvin tries his best to stay in contact with most of his subscribers on Youtube through the comments section, however, as time goes by, it gets harder and harder. He believes that influencers and businesspeople should double down on the thing that is gaining traction. In Marvin’s case, Youtube interested him, and since it gained traction, he focused on that instead of diversifying to IG TV, Snapchat, FB Stories, and the likes.

At the start, you should try everything that you can and out of the things that you tried, the one that gained the most traction is where you put all of your efforts. Once that starts running on its own, only then should you try to diversify.

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