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Margin trading amplifies both gains and losses. The speaker strictly avoids using margin, emphasizing how margin calls during downturns can wipe out investments, especially during severe declines like those experienced by Amazon in 2000 or Tesla in a hypothetical scenario. Staying away from leverage avoids catastrophic losses.
13. Pay Equal Attention to Bears and Bulls
While it’s tempting to focus solely on bullish narratives, actively paying attention to bearish perspectives helps in identifying potential risks early. The speaker advocates for monitoring critics because early warning signs often come from those who oppose your thesis most vehemently.