"I've got options, MLPS, GNMAs, cash, real estate, a basketball team, stocks, and small businesses--like I said diversification is for idiots." Mark Cuban
***** then I disagree with him more. In the options sense, having a beta weighted portfolio is actually pretty key to sustaining optimum growth. It's when you bet big one way or the other do you really open yourself up to miss out on the big score. Being slightly congruent with the market allows you to have more options because you pay less of a penalty for being wrong. If you're pushing long the market at 12x delta (meaning, if the $SPY moves up $1, your portfolio makes $12) then you have very little room for error, and since he mentioned how the retail investor can never truly be on top of the latest tips, then I don't see how he could be against diversification in that sense.
Andrew Corbett it's called putting in some actual work, in case you don't know! You won't find companies like this everyday, it may take months, even years to find a company for a good price, but when you do it is worth the wait.
NOT diversifying is for idiots. Portfolio diversification reduces the variance of returns, and with non-diversified stock portfolios you take the risk that they will fail to include the relatively few stocks that, generate large cumulative returns.
All of them have valid points, and are fairly extreme. The best thing to do would be to figure out the balance of their philosophies that fits your situation! Maybe some long-term buy and hold stocks and some short-term options trades?
I havent researched Mark Cuban a lot yet . But what i know is that he is more of a Enterpreneur and venture capitalist, so i dont know what his version of "short term" really means.
What's your version of short-term? I haven't done much research on him either but in this video he says he used options which are normally very short-term, under a year in most cases
I'd say anything from day-trading to shorter than a year. But I don't consider anything shorter than 3 years a long term position. So the 1 to 3-year term is a somewhat gray area for me.
He also points out an important point about the patent laws which have completely destroyed innovation, you cant start anything, you get sued from all the sides.. smhh.. what a shitty future we are heading into..
Here I thought innovation was not possible with the patent laws as any burgeoning inventor or entrepeneur needs to protect their IP. Otherwise, they would have no incentive to innovate.
I have been trading options for over 7 years now. I personally use an automated system to trade instead of trying to "guess" the outcomes. If you want to learn how to earn over 250 dollars a day trading online send me an email here: toshtao@gmail. com
CaptainSexy1point618 He has a valid. point. Google maybe for the first 10 years yes, but Apple and Microsoft actually haven't grown as much percentage-wise in the last 16 years as successful start-ups have. If he can get a 10.000℅ return in a few years by doing angel investment, and then invest that in yet another startup three times over, he will earn somuch more. Apple stock for instance, has only grown about 400℅ since the first iPhone was launched. The crazy volatile stock market sprints would also be much more valuable than long term investment, if he knows what he's doing.
Herfinnur Árnafjall most angel investments fail. I mean he's one to talk since he can afford to throw away large sums of money hand over fist while waiting for that big success to compensate his losses. His advice makes me cringe.
Famous last words: "I don't think stocks have fallen enough". LOL. Since this interview stocks have gone up 50%! Sorry. John Doe needs to diversify in bond / stock ETF's. Wealth is built slowly.
the Annuity Slayer He's right in that they are overvalued right now. Why are we holding on to stocks for companies that aren't showing profits and not paying dividends? Why are they being valued only on a vague promise of future cash coming to investors sometime in the future? Isn't this a case of The Emperor's New Clothes?
The same guy who talked about investing in alternative clean energy and had all his money in "dirty energy". I would never listen to Buffet. I don't think Cuban is all wizard with investing, but he does make perfect sense here.
Michael Alexeyev Its just his personal opinion, he doesnt mean it as a fact for everybody else. Warren Buffet is holding stocks for his own reasons, maybe he is saving up for the rest of his family's generation or a growth in his businesses after he passes away
Patrick Farnham But he is kind of right man.. Mark Cuban really just got lucky on a BS business that some sucker from Yahoo bought from him. He's really not the smartest, go listen to Kevin O'Leary.. You'll be happy you did.
***** You don't create luck. But you can create skill. He got lucky. He sold his company at the right time to yahoo during the internet bubble. You can't create that you moron! Testing failure and trying hard has nothing to do with luck. You sound like a 9 year old.
Mark Cuban's view actually indicate a big problem on Wall Street, which is not something only I've noticed, many economists and investors have noted the following point. Investors these days are very short sighted, their goal is to make money quick, and mitigate risks through shady dealings. Gone were the day of long term investments, these days it is all about how fast and how much profit, at any cost. Between high frequency trading (which have some good and some bad), and the new investment style that only millionaires and billionaires can afford to do, everyone else suffers. In fact sometimes it feels like investments are more of a rigged game these days. People use to gamble and lose it all on Wall Street sometimes, but when was the last time we seen investors actually losing money? Very rare these days, which speaks volume about how the financial sector mitigate risk to the point of cronyism.
***** i fully agree. my mother's worked at some of the biggest companies on wall street for the better part of the last 40 years. I've spoken to some of those guys. All intricacies aside, you're pretty much right on the money. Pun somewhat intended.
***** Go study the history of Wall Street and investment. You are not using the same measurement of long term and short term as the financial sector if you can't understand my original comment.
hobo9596 You are talking about the recent crash, but my original comment was a comparison between the era post depression America in late 1920s and onward and modern Wall Street. (It would not make sense to compare to something that only happened a few years ago when talking about long term trends would it?) Compare to back then, short term investments have become the norm, but long term investment have become less common. Short term can be anywhere from a fraction of a second to a few fiscal year, while long term would meaning at least several years. I am not talking about speculations, only investment. Of course the two do have certain aspects that overlap.
There's little need to invest long term in companies that don't pay dividends. And the biggest ones today offer little or no income. It's all in the stock price. So if you are forced to sell to realise gains, you take your money and run, to either the next holy cow or cash out.
I have new profound deep respect for the mind of Mark Cuban. In the last few hours I've been seeing some of his interviews and have come to see a part of Mr. Cuban that the media never acknowledges. Mark Cuban is a very smart man. His thinking is deep as one of my favorite sports stars today Brad Keselouski of NASCAR.
Cuban certainly has a right to invest however he wants, but he can't call buy and hold a crock of shit nor can he imply that people who diversify are idiots. There are a lot of people out there who are happy with the returns of the S&P 500, beating inflation, and don't want to take on the additional risk of choosing individual stocks. Also last time I checked, diversification was a smart thing to do, and not for idiots. Simply diversifying among U.S. large, mid & small cap, international developed & emerging markets will be beneficial for your portfolio. Seems like indexing, buy and hold, and diversification are too boring for Cuban, but it doesn't mean they don't work.
Say there is an Island with a resort on both sides and each year a storm will typically hurt profits on one of the sides. If you don't have any idea where the storm is going to hit. You should diversify and invest in both, and hope that the cumulative positive outwieghts the negative. So if a person is an idiot, they probably should diversify. But if a person was the kind of person who can turn himself into a billionare, you probably didn't diversify and you know and can find out which side of the island the storm will hit metaphorically speaking. I think that is what Cuban is getting at.
jmoneylee Yea but he didn't make his fortune investing in stocks so I think from his perspective he makes some misinformed statements. We have a lot of history we can look at that proves diversification works and actually boosts returns. Diversification can be as simple as owning an S&P Index Fund, an International Fund, a REIT fund, where you'll own hundreds of stocks in the funds (not just 2 resorts). I honestly think that type of investing is too boring for him, which is entirely ok. I think your analogy oversimplifies it. You're right in that you can never predict where the storm is going to hit and what is going to happen, but over 30-40 years, the positives will outweigh the negatives. Your dividends will accumulate, money will compound, returns will outpace inflation as corporations have pricing power. Also in terms of "storms" hitting, take a look at any crash, and soon afterwards, the markets comes back to hit new highs. Stocks are the single best hedge against inflation. His claim that buy and hold is a crock is also just plain false. You do need patience and it's not a get rich quick kind of thing, and I think that's where Cuban doesn't like it. Also he may not consider millions to be a lot of money (since he's a billionaire), whereas others do.
Bryan Herber I agree with that, market is to competitive to really get a great advantage on a single high risk reward insturment. But that is why he advocated keeping it in cash, because he can invest in startup companies and put his money where he does feel he has an greater advantage outside the market, he was trying to elude to that side of the coin in the video that there are other ways to make use of cash outside the market. He said he only puts his money in the market if he feels he does have a good advantage on a specific area. I could be adding words to his mouth but, if a person wants to be very wealthy like Cuban, his method of putting your money where you have a clear advantage is the way to do it. If you want to retire well and you are a person who has no clear advantage or any specific knowledge then diversifying is a great way to retire sooner.
Bryan Herber If an invester earns more than the index he is trading in, then he was not fully diversified. Warren buffet types makes lots of money by not being fully diversified. So I would think diversifying can be used hurt an advantage or used to in a way to not diminish an advantage. Buffet types I bet don't use it to hurt their advantage, because they earn far more than the index.
Let's not forget how he did "start from the bottom, now he's here." I hate to quote an awful rap song but Cuban got rich by satsifying the wants, needs, and/or desires of consumers. Entrepreneurs like Cuban have created more jobs and productivity than any politician ever has. I think Americans owe a debt of gratitude to entrepreneurs like a Mark Cuban who took the risks associated with becoming a business owner. Anyone can collect a paycheck, it takes a special person to take the risks.
Diversification is useful to the investor without a lot of capital. The idea is that if you put all your money into one place and it loses, you've lost a lot of your equity, so it's hard to recover. If you have enough money to recover like Cuban does, it isn't as necessary, he can be more risky.
Brett Gornall The idea behind diversification is that if you put all your money in one place, and it loses value, then you've lost your money without any other investments to make up for the loss. But if you were invested in several companies, it doesn't hurt as much when one of them loses because the other ones probably gained (or at least didn't lose a lot of value). Let's say I have 5 stocks in only one company. We'll say it's a gold mining company. NUGT, for example. For some reason, the stock plummets and never recovers. Now, my entire portfolio has lost money that it will never get back. If I had really owned only NUGT in 2011, each stock was worth about $19,000. Today, NUGT is worth a measly $71/share. In 5 years, it dropped more than 250%. If I had a portfolio that was diverse, I could've recovered from that loss, because my other stocks might've gained. But since I hypothetically only owned the 5 NUGT shares, I'm so far deep in the hole I can't even see the surface. For the investor who wants diversity without having to track a lot of stocks, it may be wise to invest in an ETF or mutual fund. You buy into these and you only own shares of that fund, but the fund itself is invested into many more different instruments. For example, I own shares of AKREX, a mutual fund, which invests in retail - mastercard, visa, american tower, markel, carmax, and more - I don't own any shares of those companies, but the _fund_ does, so I can benefit from the diversity of the fund without needing to diversify my own portfolio.
+Saga Diversification is inherently better. If I have four correlated assets with a certain performance, and four uncorellated assets with, for arguements sake, 20 percent lower performance than my corellated assets, the correllated assets are a more promising investment. The reason for this is because I can push the leverage and realize a better return with uncorrellated assets.
+Brett Gornall The problem is that you can do ALL the research you want, but remember that an investment always involves risk. Unless you have inside information not available to the public. But that is cheating and its also penalized. Even government bonds. You expect that the government is going to pay you back, however, as little as it can be, there is still risk. Diversification is key for a best investment. Its all about the odds..
Remember that diversification is a way to reduce risk. It's valid to use all your capital in one investment, however it's to risky since all investments involve uncertainty. People can diversify the porfolio for many reasons. Imagine some investments are more liquid than others. For that reason, you invest in different sectors of the market to have liquidity when needed. Specifically in the stock market, people diversify the portafolio by investing in different stock they predict will increase its par value. If some predictions turn out to be wrong, they will still have gained in other areas, whereas going all in, you could loose it all at once. The truth is, in the real financial world you will never know for sure if a stock or bond will provide returns for that reason people diversify.
Of the dozens of Cuban quotes I've heard how have I missed "Yes about a dozen times and I liked it" until now? I laughed so hard I had to pause the video.
DYOR. - XRP has literally no use case. - The owners own more then 60% of xrp. - Banks are testing ripple. Nobody has EVER commented that they are going to use xrp. -They already have a 70B market cap. Without showing any value.
His strategy is to Buy OTM Calls when SPY drops and Buy Puts - when SPY has run up. OK - GOT IT. should have bought APPL and held - like he implied. This was December 2011 >>>>> Starts @ 4:00 mark
This interview has proved to be of a great help to me... I have put 'each and every statement' of Mr Cuban into action and it has helped me in so many scenarios... This is like a tenth time I watch this interview and I cant get tired of watching it...
Best point ever is that so many people piss away half their time on bullshit, and 18% of their cash on credit cards, while at the same time hoping to gain 5-10% on investments. - It's so obvious yet I know so many friends who does it. With a smart budget at home you can easily save 25% just with simple adjustments. THEN you can add an interest on top of that if wanting to go further.
Yeah, best to keep those credit balances low if the interest is more than 5 or 6 percent...which almost all are. Cash flow is a concern, but pay down those cards!
Kill the credit cards first then car loan debt, and any other ridiculous interest debt before you even think of investing. That 18% you don't have to pay is going to be worth far more than most any return you could expect to make. Not a fan of budgets, don't just buy things you can't afford, and use something like mint to track your purchases.
Ohh my gosh! I said exactly the same thing about bidding on job creation to my friend a few years ago. I'm so excited to see that someone thinks alike. I also think diversification is stupid- far better to just pick the right investment instead of the shotgun approach. Keep telling the truth man. Completely agree !
The theory of portfolio diversification is a textbook approach into minimizing your portfolio's risk. Unless you have a strong belief that some stocks will generate a risk-less return then you should diversify your portfolio. My portfolio is well diversified and I've been able to maintain an average of 10.4% return for the past 3 years.
Holding everything in cash, awaiting volatility to give you the opportunity of a lifetime to "buy the dip," is a terrible strategy, by which, in the long run, one is likely to have found oneself having sat out of many of the gains one else would have enjoyed.
Diversification is for people with money that can afford it. If you’re starting from the bottom you have to F.O.C.U.S (Follow one course until successful)… THEN you can diversify.
As a business owner and professional investor, I completely agree with Mr. Cuban. Fortunes are usually created through concentration opposed to diversification. Mark Cuban made his fortune during the tech boom. John Rockefeller made his fortune in oil. Henry Ford made his fortune in automobiles. While it is true that holding cash isn't an effective recipe for growth, at least you aren't losing. All investments involve risk and your average family man shouldn't be pressured into taking unnecessary risks. Remember, 90% of the investment public loses. This includes the "buy, hold, and diversify" crowd. - David Trungale, Tradertours Owner
Hope you get this. Total neophyte here. What about buying and holding the market (SPDR)? Doesn't that, historically, offer very consistent positive return?
+Kaddywompous It is true that over a multi-decade period, the S&P and DOW have historically gone up. However, there always will be bear markets. During the Great Depression for example, the markets took almost 30 years to recover. Cash should always be part of your portfolio regardless of your investment strategy.
+tradertoursdotcom 90% of TRADERS lose. Most people consider themselves investors when they are actually trading/speculating. Many people confuse a great investor/business with a bull market too. He sold a company that doesn't even exist today.
Because we all know that cash, especially sitting in a savings account, has historically outperformed stocks. Worst advice ever, right next to his "borrowing money to open a business is for idiots."
I think what he means is that when you are beginner at investingin the stock market, you should focus on only one or two stocks at a time so you become very familiar with their fluctuation patterns. Basically you become a specialist in those 2-3 stocks. But once you become wealthy, you can expand or "diversify" to other stocks to increase your chances of staying in the positive. Obviously , you need to invest in the right companies so that your portfolio will always look something like 80% gains 20% loss. The losses don't matter if your gains outweigh them, its basic math. I'm an amateur trader and seem to have a natural talent at studying fluctuation patterns. I just love numbers.
He is right on the money with the current patent litigation culture. If we can reform the way that IP is handled and how it is enforced, we can drastically improve the entrepreneurial environment for companies big and small.
I can apply Mr. Cuban's advise to fit my budget, but as a new entrepreneur I'd give anything to sit down with him, and pick his brain for an hour at least. I like the fact that this guy seems authentic and will tell it to you straight. Just one hour 👍🏼
I completely agree with Cuban. Buy and hold is ok if you think your stock is going to keep going up. With every investment, there is a good time to hold the stock and good time to not hold the stock. Don't just hold on to something if it's bad and you just want to wait it out. Making money in the stock market is about making correct 50/50 decisions. At what point do I pull my money out and put money in? Research the stock, at least look at a few recent headlines and averages and see why the stock is up or down. I just bought Annie's (BNNY) today because it dropped 8% but only because of a shortage of wheat. That's a temporary problem that will fix itself shortly and will recover easily.
"Do not store up for yourselves treasures on earth, where moth and dust destroy, where thieves break in and steal. But store up for yourselves treasures in heaven, where neither moth nor dust destroy, and thieves do not break in and steal." -Jesus
You could answer that simple question. But I will indulge. As the bible puts it, some people are hearers of the word but not doers of the word or hypocrites. No one lives completely up to their word, their own set of morals, or Gods word. That's the reason that those who believe in Christ are saved by GRACE. The bible doesn't change no matter what Trump, or any Christian does.
The easiest way to make money is to buy a house, rent it out and let the renter pay for the house while you live in a trailer park or with your family, then once the house is paid for… keep renting it out and buy a second house which will now be financed by whoever is renting the first house. Rent out the second house as well, keep living low cost don't buy bullshit luxury items to stroke your ego and wait until the second house is paid off. Now you have 2 houses paid off. Now buy a third house by renting out the other two houses. It will be paid off twice as fast. Keep doing this until you have enough real estate to never ever work again and have other people generate your income. Imagine having 10 houses paid for and renting them out. The more assets you have the faster you can pay off another mortgage the richer you'll get exponentially. And most important of all, then you can finally buy things cash and don't have to worry about liabilities and interest.
Speaking on risk and diversification, I think he is spot on. People are taking the wrong message from what he is saying. There is a tendency for investors to over diversify to a point where you do not know everything about every company in your portfolio. There has been multiple studies done where it shows holding just 4 different positions reduces most of the risk, I can't remember what the figures were but its well documented. Diversification is not to reduce market risk because in a "efficient" market like the US, if the S&P goes down everything else will likely go with it unless you find the 1 or 2 safe havens whether its municipal bonds or whatever. I think the purpose of diversification is to reduce unforeseen risk like a missing Malaysian airlines, or a natural disaster that takes out the headquarters of a business.
he's basically just saying resist the animal spirits of the markets and don't invest in something that you don't know. Not rocket science, however even with this - luck is a huge factor.
well diversification would be for idiots when they are not prepared to lose. But when you're Mark Cuban, you can be ready to lose when you're a friggin' Billionaire.
I wish I understood all of this. I'm desperate to learn everything I can about the business world especially from people like Mark Cuban but I don't understand 90% of what they're talking about. I'm trying to find a good spot to start learning and go from there.
Buffet understood the long game at a young age, and even if you ask him he was the right guy in the right place at the right time. I'd say that if you did that, Buffet would be more likely to die happy, but he simply doesn't have enough time to build back to billionaire status using the system that got him where he is today.
Richard Peach correct!!! Warren Buffett invested in a time where everything we use today was basically being invented. It took him 10 years to make his first $100,000. I made that in three months in crypto. I wonder if that means I'll be a trillionaire lol...
Very intelligent takes by Mark. For those that don't follow and continue to push for diversification. To paraphrase mark, "hey if you are an average Joe, you can't compete with the programming software and knowledge Walstreet relies on to make money on funds etc. Save your money and invest in what you KNOW will likely return money (ie if you are a pharmacist and know of great company invest, if you are a tech guy and know in a company that is likely to succeed invest or if you simply love what some company is doing and believe, invest etc). He doesn't believe in investing in a bunch of different things and getting a small return in the future." I agree. If you are confident in your decision making, go for it. If you are just diversifying because it's the hip thing to do now, well GL.
Cuban here is talking about diversification in the academic sense. ie buying hundreds of stocks or simply buying an index fund which is terrible mistake if you want to obtain above average return considering the index is the 'average'.
Considering the fact that 96% of professional institutional fund managers fail to match the return of the market, and the 4% who do are not the same ones who did it last year then NO the market return is not average, it is a rate of return that very few people are smart enough to get out of their own way and take advantage of.
wulf67 No, thats because of high fees,transaction costs and taxes. If you combine all the portfolios of all fund managers the return on it before costs has to be the same as the index because it would in itself be an index. And look, i think an index fund is probabaly the best way to invest for 99% of people. However, you can't expect to make say a 12% return compunded over decades by investing in a index fund so if thats what you're aiming for it would be a mistake to diversify that's all i'm saying.
Sam Li 1. They fail to match the returns of the market also because the human mind is prone to irrational decisions and news occurs on a random basis. 2. Anything can be an "index" but "the market" is not the same as any index. 3. If you expect to make a 12% return consistently "over decades" then your expectations are unrealistic. How can you expect to make rational investment decisions when things get crazy if your entire concept of reality is so distorted to begin with? 4. We DON'T KNOW what is going to happen in the news that could wipe out returns for any company, industry, sector, region, or asset class. The wise investor recognizes this fact and diversifies, not just his stock holdings, but diversifies across sectors, across markets, across asset classes, and across time.
Sam Li If you look at Berkshire Hathaway's holdings you will see that Warren Buffett is well diversified across companies, industries, sectors, and markets. That's why I am not worried about having almost 8% of my portfolio in BRK.
I invest, he's sneaky with his words. He says don't diversify but then when he talks he is all over the place, Australian market, bonds, sports, ect. Translation, invest in what you do heavy research on. In short, what any serious individual investor does! Know what you buy into before doing so and why (i.e. keep a journal of date of purchase, how much was paid and why you bought it).
"know what you're investing in" is not just an investment method, it's a particular application of a more general principle: "rely on your own judgment". If you have capital, it's a safe bet that you earned it by relying on your own mind. I doubt you accumulated savings by stocking shelves at Walmart, you must've earned that money through some kind of intellectual effort (or the person you inherited it from did). But now, all of a sudden, you want to make more money, without exerting any of that effort? You really think that'll work? You really think you can create wealth without being creative or productive, even though thus far, you had to earn everything you have? Trust me, you can't. No one can.
anomy safad lots of ppl destroy the market, even with little research. ha, i've seen a piggybacker who made 75% annually from 2003-2013. and, there is a well-known pro piggybacker who beats the market - Mohnish Pabrai!
anomy safad how the hell am i supposed to name a million ppl? i could name maybe 30 investment managers that beat the mkt and point to another hundred individuals. buy&hold is complete crap. if your assumption is that stocks as a whole go up for 30 yrs, why not buy a leveraged index ETF? there you go, secret formula to beating the market revealed!
Screw diversification and buy and hold strategy? Oh really? Go and argue that with Warren Buffet, the 4th richest man in the world, who employs all of those strategies.
yeah it's a bit iffy isn;t it. but then there is alo the bit where he says something like, " that works great for Warren because he can put 7 billion into a company but that doesn't work for the average joe" but if Buffet has been doing it from the start then yeah. The thing that Buffet always alway always talks about is real assets that generate passive income which is kinda important it seems. and yes i am a newbie
Leggo My Ego hmm. thats interesting. makes sense though with the way he talks about investing in companies that have steady growth and profit and just well managed companies i guess. it seems like he saying it really is possible to pick a winner.
"Diversification is protection against ignorance. It makes little sense when you know what you're doing. "-Warren Buffet. Warren doesn't diversify. He is a fundamentalist value investor who looks to make large acquisitions with substantial percentages of his portfolio. He values a business and buys it on sale. When he tells the average investor to diversify its because he knows the average investor is ignorant and lacks the emotional fortitude to stay committed to a single company.
Mark was in the right place at the right time when he started online. If it was not him at that moment in time. it would be someone else we would be listening to today.
It's easy for Mark to put all his eggs in one basket and risk loosing a fortune. Most people can't afford to take that risk, that's why diversification is great way to hedge your investments.
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Being flexible with a solid base of ethics is how you run a business. Having foresight and being able to maneuver through the markets while maintaining established core principles. In other words the costumer is always right to the extent that they are not able to manipulate you.
Everyone is hating on Cuban. Even Buffet said the same thing. Put money aside, save save save, and take advantage of a down market. It’s so simple. Idk why anyone is hating. Buffet said fine 3 business that are not going anywhere and invest in those 3. Vs 50 stocks spread out. I have my eye on 3 and I’m invested up 73% in 3 months. And I’m watching one more because I love what direction it’s heading. Not dumping too much money yet until I see it grow outward a little more. But I’m not sure on the toothpaste thing, I’ve tried to buy bulk but you’re not saving much money. The reason poor people stay poor is because they don’t have cash on hand for opportunities.
Government funding is stolen money, we cannot progress with tax money backing any risky venture. That is absurd. Capital constraints are created by taxation to consumers who are robbed before having the opportunity to allocate their capital. Really lost alot of respect for Cuban today.
Applauding myself after a year of consistent dedication and growth, investing 40% of my pay monthly into ETFs and Index funds, I can boast of $135k in profits so far. Cheers
there’s no magic there, every form of business or investments involves risks but I work with an expert trade analyst so it is a lot easier, you can look him up if interested. Eddybruke .info
Such a great video, thank you for your wonderful insights Mark. I feel like we are very similar and would totally get along as crazy entrepreneurs that make it happen while young!!!
are you making money off the Mavericks....... Cuban: "I can't talk about it." If you can't talk about it then why are you giving "any" advice...... C'mon man!!!!!!!
"Buy and hold is a crock of $%^%$#@" LOL!!! Uhhh Warren Buffet, Peter Lynch, and Bill Ackman, "buy and hold" is the foundation of their investment thesis. Boggles my mind how someone so rich can say something so careless.
Here's the problem with cuban, and honestly until i saw this he was my favorite shark on shark tank... He MUST win... If he can't win, and he knows he can't win, he wont play. With stocks, he can't always win, so therefore he refuses to play. Stocks are a give and take of win/loss. Somedays you win, other days you lose, the goal is to have a ratio of more wins to loss. Cuban knows that the market is outside the scope of his interest, and research capacity, therefore he refuses it all together... Cuban, dont throw the baby out with the bath water. Diversification IS not for idiots, its for a seasoned investor that understands that diversifying mitigates risk. Cuban, i think you are a great CEO, but a horrible investor(based on what i saw in this video).
Mark Cuban didn't say cancel the whole patent system. he's saying the system needs more supervision and controlling, because suing people has become an american culture that hinders entrepreneurship, and without entrepreneurship there will be no job opportunities. that's what cuban was explaining
"I've got options, MLPS, GNMAs, cash, real estate, a basketball team, stocks, and small businesses--like I said diversification is for idiots." Mark Cuban
*****
then I disagree with him more. In the options sense, having a beta weighted portfolio is actually pretty key to sustaining optimum growth.
It's when you bet big one way or the other do you really open yourself up to miss out on the big score. Being slightly congruent with the market allows you to have more options because you pay less of a penalty for being wrong.
If you're pushing long the market at 12x delta (meaning, if the $SPY moves up $1, your portfolio makes $12) then you have very little room for error, and since he mentioned how the retail investor can never truly be on top of the latest tips, then I don't see how he could be against diversification in that sense.
I just find anyone making below 20% ROI monthly hilarious, it's depressing to know that the average ROI is 7% annual, lol.
amartinblueplanet do you not think he was referring to stock market investment solely? That's how I took it anyhow.
HAHAHAH
amartinblueplanet he's such a dumb ass
Great advice i just bought 50k worth of toothpaste
lol..........
@ warren buffet, that mean not be the best thing!
I think diversification is for you
I lost it when I read this xD
Thanks man! My toothpaste stocks went up because of you...
"As long as you buy a good company at a reasonable price, you will make money" -Warren Buffett
yea, if you can find a company that isn't overvalued already....good luck with that.
Andrew Corbett it's called putting in some actual work, in case you don't know! You won't find companies like this everyday, it may take months, even years to find a company for a good price, but when you do it is worth the wait.
Yea okay, if you can beat the hedge funds and get in before they do...not saying its impossible but good luck with that.
The stock market is comprised of soulless rich insider crooks. Can you make money??? Sure....Are the cards stacked against you???...hell yea they are.
Andrew Corbett I'm sorry you feel that way, but if "giving up" is YOUR best bet...good luck with that!!!
It's easy to say that nonsense when you're so rich that throwing away $250k in the trash is no big deal.
NOT diversifying is for idiots. Portfolio diversification reduces the variance of returns, and with non-diversified stock portfolios you take the risk that they will fail to include the relatively few stocks that, generate large cumulative returns.
"All that asset management, diversification, that's for idiots right". Perhaps the truest and best quote on investing ever made haha.
So who should i believe. Buffet and Graham, or this guy.
Compare net worths and make that decision
All of them have valid points, and are fairly extreme. The best thing to do would be to figure out the balance of their philosophies that fits your situation! Maybe some long-term buy and hold stocks and some short-term options trades?
I havent researched Mark Cuban a lot yet . But what i know is that he is more of a Enterpreneur and venture capitalist, so i dont know what his version of "short term" really means.
What's your version of short-term? I haven't done much research on him either but in this video he says he used options which are normally very short-term, under a year in most cases
I'd say anything from day-trading to shorter than a year.
But I don't consider anything shorter than 3 years a long term position.
So the 1 to 3-year term is a somewhat gray area for me.
Mark Cuban is one of those people that doesn't like other people to get rich.
l1998 Its bad for the economy if EVERYBODY is rich, America is already in a shithole of debt
l1998 welcome to capitalism
This is all rich people.
JrBlnX not true
This is like talking to a six year-old about how the world works.
He also points out an important point about the patent laws
which have completely destroyed innovation, you cant start anything, you get sued from all the sides.. smhh.. what a shitty future we are heading into..
Here I thought innovation was not possible with the patent laws as any burgeoning inventor or entrepeneur needs to protect their IP. Otherwise, they would have no incentive to innovate.
he said not to buy apple in this video @ 4:06 , 5 years later it has gone up 100%, well played...
And now Apple is the biggest company in the world...
first time i've heard of someone saying to keep cash rather than invest if nothing is good. that's the principle i take as well.
I have been trading options for over 7 years now. I personally use an automated system to trade instead of trying to "guess" the outcomes. If you want to learn how to earn over 250 dollars a day trading online send me an email here: toshtao@gmail. com
Adam richardson
CaptainSexy1point618 He has a valid. point. Google maybe for the first 10 years yes, but Apple and Microsoft actually haven't grown as much percentage-wise in the last 16 years as successful start-ups have. If he can get a 10.000℅ return in a few years by doing angel investment, and then invest that in yet another startup three times over, he will earn somuch more. Apple stock for instance, has only grown about 400℅ since the first iPhone was launched. The crazy volatile stock market sprints would also be much more valuable than long term investment, if he knows what he's doing.
Herfinnur Árnafjall most angel investments fail. I mean he's one to talk since he can afford to throw away large sums of money hand over fist while waiting for that big success to compensate his losses. His advice makes me cringe.
Famous last words: "I don't think stocks have fallen enough". LOL. Since this interview stocks have gone up 50%! Sorry. John Doe needs to diversify in bond / stock ETF's. Wealth is built slowly.
Unless you have a billion, of course you could put it all in cash. For the rest of us average Joe's we need to take the advice you just stated.
the Annuity Slayer He's right in that they are overvalued right now. Why are we holding on to stocks for companies that aren't showing profits and not paying dividends? Why are they being valued only on a vague promise of future cash coming to investors sometime in the future? Isn't this a case of The Emperor's New Clothes?
Wealth isn’t necessarily built slowly
Sorry Mark but I think I'll follow Buffet's strategy instead of yours lol...
The same guy who talked about investing in alternative clean energy and had all his money in "dirty energy". I would never listen to Buffet. I don't think Cuban is all wizard with investing, but he does make perfect sense here.
Buffet's strategy works for people with a lot of money so if you are starting from scratch you can't follow it
To follow Buffet's strategy, you must have Buffet's level of patience.
Most don't. And thus most fail.
Think you can do it? Sure, try it. Good luck.
warren buffet hates diversification
Buffett said the same thing genius
He should tell Warren Buffett "buy and hold is a crock of shit." Bad investment advice
Michael Alexeyev Its just his personal opinion, he doesnt mean it as a fact for everybody else. Warren Buffet is holding stocks for his own reasons, maybe he is saving up for the rest of his family's generation or a growth in his businesses after he passes away
Just because your a billionaire doesn't mean your brilliant.
Let me ask you how much money do you have you idiot
bite me
Patrick Farnham But he is kind of right man.. Mark Cuban really just got lucky on a BS business that some sucker from Yahoo bought from him. He's really not the smartest, go listen to Kevin O'Leary.. You'll be happy you did.
***** You don't create luck. But you can create skill. He got lucky. He sold his company at the right time to yahoo during the internet bubble. You can't create that you moron! Testing failure and trying hard has nothing to do with luck. You sound like a 9 year old.
thx
i guess he just can't relate to us still on the rise.
Diversification is not for idiots its for not going broke
Mark Cuban's view actually indicate a big problem on Wall Street, which is not something only I've noticed, many economists and investors have noted the following point.
Investors these days are very short sighted, their goal is to make money quick, and mitigate risks through shady dealings. Gone were the day of long term investments, these days it is all about how fast and how much profit, at any cost. Between high frequency trading (which have some good and some bad), and the new investment style that only millionaires and billionaires can afford to do, everyone else suffers. In fact sometimes it feels like investments are more of a rigged game these days.
People use to gamble and lose it all on Wall Street sometimes, but when was the last time we seen investors actually losing money? Very rare these days, which speaks volume about how the financial sector mitigate risk to the point of cronyism.
***** exactly.
***** i fully agree. my mother's worked at some of the biggest companies on wall street for the better part of the last 40 years. I've spoken to some of those guys. All intricacies aside, you're pretty much right on the money. Pun somewhat intended.
***** Go study the history of Wall Street and investment. You are not using the same measurement of long term and short term as the financial sector if you can't understand my original comment.
hobo9596 You are talking about the recent crash, but my original comment was a comparison between the era post depression America in late 1920s and onward and modern Wall Street. (It would not make sense to compare to something that only happened a few years ago when talking about long term trends would it?)
Compare to back then, short term investments have become the norm, but long term investment have become less common. Short term can be anywhere from a fraction of a second to a few fiscal year, while long term would meaning at least several years.
I am not talking about speculations, only investment. Of course the two do have certain aspects that overlap.
There's little need to invest long term in companies that don't pay dividends. And the biggest ones today offer little or no income. It's all in the stock price. So if you are forced to sell to realise gains, you take your money and run, to either the next holy cow or cash out.
I have new profound deep respect for the mind of Mark Cuban. In the last few hours I've been seeing some of his interviews and have come to see a part of Mr. Cuban that the media never acknowledges.
Mark Cuban is a very smart man. His thinking is deep as one of my favorite sports stars today Brad Keselouski of NASCAR.
haven't listed to the interview yet, but "diversification is for idiots" advise is already so wrong
Pavel Fedotov Is Warren Buffet an idiot too?
3:23 the scene everyone wants to watch!
Cuban certainly has a right to invest however he wants, but he can't call buy and hold a crock of shit nor can he imply that people who diversify are idiots. There are a lot of people out there who are happy with the returns of the S&P 500, beating inflation, and don't want to take on the additional risk of choosing individual stocks. Also last time I checked, diversification was a smart thing to do, and not for idiots. Simply diversifying among U.S. large, mid & small cap, international developed & emerging markets will be beneficial for your portfolio. Seems like indexing, buy and hold, and diversification are too boring for Cuban, but it doesn't mean they don't work.
Yeah this one was a bit out in left field.
Say there is an Island with a resort on both sides and each year a storm will typically hurt profits on one of the sides. If you don't have any idea where the storm is going to hit. You should diversify and invest in both, and hope that the cumulative positive outwieghts the negative. So if a person is an idiot, they probably should diversify. But if a person was the kind of person who can turn himself into a billionare, you probably didn't diversify and you know and can find out which side of the island the storm will hit metaphorically speaking. I think that is what Cuban is getting at.
jmoneylee Yea but he didn't make his fortune investing in stocks so I think from his perspective he makes some misinformed statements. We have a lot of history we can look at that proves diversification works and actually boosts returns. Diversification can be as simple as owning an S&P Index Fund, an International Fund, a REIT fund, where you'll own hundreds of stocks in the funds (not just 2 resorts). I honestly think that type of investing is too boring for him, which is entirely ok. I think your analogy oversimplifies it. You're right in that you can never predict where the storm is going to hit and what is going to happen, but over 30-40 years, the positives will outweigh the negatives. Your dividends will accumulate, money will compound, returns will outpace inflation as corporations have pricing power. Also in terms of "storms" hitting, take a look at any crash, and soon afterwards, the markets comes back to hit new highs. Stocks are the single best hedge against inflation. His claim that buy and hold is a crock is also just plain false. You do need patience and it's not a get rich quick kind of thing, and I think that's where Cuban doesn't like it. Also he may not consider millions to be a lot of money (since he's a billionaire), whereas others do.
Bryan Herber I agree with that, market is to competitive to really get a great advantage on a single high risk reward insturment. But that is why he advocated keeping it in cash, because he can invest in startup companies and put his money where he does feel he has an greater advantage outside the market, he was trying to elude to that side of the coin in the video that there are other ways to make use of cash outside the market. He said he only puts his money in the market if he feels he does have a good advantage on a specific area. I could be adding words to his mouth but, if a person wants to be very wealthy like Cuban, his method of putting your money where you have a clear advantage is the way to do it. If you want to retire well and you are a person who has no clear advantage or any specific knowledge then diversifying is a great way to retire sooner.
Bryan Herber If an invester earns more than the index he is trading in, then he was not fully diversified. Warren buffet types makes lots of money by not being fully diversified. So I would think diversifying can be used hurt an advantage or used to in a way to not diminish an advantage. Buffet types I bet don't use it to hurt their advantage, because they earn far more than the index.
Let's not forget how he did "start from the bottom, now he's here." I hate to quote an awful rap song but Cuban got rich by satsifying the wants, needs, and/or desires of consumers. Entrepreneurs like Cuban have created more jobs and productivity than any politician ever has. I think Americans owe a debt of gratitude to entrepreneurs like a Mark Cuban who took the risks associated with becoming a business owner. Anyone can collect a paycheck, it takes a special person to take the risks.
he comes here wearing an nba shirt but doesnt wanna talk about it.
That's what douche bags do.
classic! thats what i thought as well.
It was during the lockout, everyone involved with the league was prohibited from talking about it by contract. Listen next time.
then dont wear an nba shirt then!!
Terrence Ngobese Why not?
In case if you guys didn't know. In the world of finance, holding cash means holding short term U.S. Treasury Bills.
Diversification is useful to the investor without a lot of capital. The idea is that if you put all your money into one place and it loses, you've lost a lot of your equity, so it's hard to recover. If you have enough money to recover like Cuban does, it isn't as necessary, he can be more risky.
+Saga But if you focus and do your research wouldn't that be less risky than having a bunch of investments you have trouble keeping track of?
Brett Gornall
The idea behind diversification is that if you put all your money in one place, and it loses value, then you've lost your money without any other investments to make up for the loss. But if you were invested in several companies, it doesn't hurt as much when one of them loses because the other ones probably gained (or at least didn't lose a lot of value).
Let's say I have 5 stocks in only one company. We'll say it's a gold mining company. NUGT, for example.
For some reason, the stock plummets and never recovers. Now, my entire portfolio has lost money that it will never get back.
If I had really owned only NUGT in 2011, each stock was worth about $19,000. Today, NUGT is worth a measly $71/share. In 5 years, it dropped more than 250%.
If I had a portfolio that was diverse, I could've recovered from that loss, because my other stocks might've gained. But since I hypothetically only owned the 5 NUGT shares, I'm so far deep in the hole I can't even see the surface.
For the investor who wants diversity without having to track a lot of stocks, it may be wise to invest in an ETF or mutual fund. You buy into these and you only own shares of that fund, but the fund itself is invested into many more different instruments. For example, I own shares of AKREX, a mutual fund, which invests in retail - mastercard, visa, american tower, markel, carmax, and more - I don't own any shares of those companies, but the _fund_ does, so I can benefit from the diversity of the fund without needing to diversify my own portfolio.
+Saga Diversification is inherently better. If I have four correlated assets with a certain performance, and four uncorellated assets with, for arguements sake, 20 percent lower performance than my corellated assets, the correllated assets are a more promising investment. The reason for this is because I can push the leverage and realize a better return with uncorrellated assets.
+Brett Gornall The problem is that you can do ALL the research you want, but remember that an investment always involves risk. Unless you have inside information not available to the public. But that is cheating and its also penalized.
Even government bonds. You expect that the government is going to pay you back, however, as little as it can be, there is still risk.
Diversification is key for a best investment. Its all about the odds..
Remember that diversification is a way to reduce risk. It's valid to use all your capital in one investment, however it's to risky since all investments involve uncertainty.
People can diversify the porfolio for many reasons. Imagine some investments are more liquid than others. For that reason, you invest in different sectors of the market to have liquidity when needed. Specifically in the stock market, people diversify the portafolio by investing in different stock they predict will increase its par value. If some predictions turn out to be wrong, they will still have gained in other areas, whereas going all in, you could loose it all at once.
The truth is, in the real financial world you will never know for sure if a stock or bond will provide returns for that reason people diversify.
Of the dozens of Cuban quotes I've heard how have I missed "Yes about a dozen times and I liked it" until now? I laughed so hard I had to pause the video.
Buy and Hodl.
but not ripple, scam coin.
why do you say that?
DYOR.
- XRP has literally no use case.
- The owners own more then 60% of xrp.
- Banks are testing ripple. Nobody has EVER commented that they are going to use xrp.
-They already have a 70B market cap. Without showing any value.
no use case? it beats the swift system
Agreed on Ripple. Horrible coin. For me Digibyte is going to play a huge part in the future of crypto. Lightning quick coin with great security.
His strategy is to Buy OTM Calls when SPY drops and Buy Puts - when SPY has run up. OK - GOT IT. should have bought APPL and held - like he implied. This was December 2011 >>>>> Starts @ 4:00 mark
This interview has proved to be of a great help to me... I have put 'each and every statement' of Mr Cuban into action and it has helped me in so many scenarios... This is like a tenth time I watch this interview and I cant get tired of watching it...
That law suit aspect of this was deep. That does show how volatile the game has become. I see many of you missed those.
If you should listen to any of the people from Shark tank, then listen to Kevin O'Leary.
I died laughing when he suggested stockpiling toothpaste to avoid losing your cash to inflation, this is so ridiculous
"Are you going to store up?" "Yeah" How much toilet paper would you have to buy to make it worth the inflation hedge? You'd have fill up your garage.
Best point ever is that so many people piss away half their time on bullshit, and 18% of their cash on credit cards, while at the same time hoping to gain 5-10% on investments. - It's so obvious yet I know so many friends who does it.
With a smart budget at home you can easily save 25% just with simple adjustments. THEN you can add an interest on top of that if wanting to go further.
Yeah, best to keep those credit balances low if the interest is more than 5 or 6 percent...which almost all are. Cash flow is a concern, but pay down those cards!
Kill the credit cards first then car loan debt, and any other ridiculous interest debt before you even think of investing. That 18% you don't have to pay is going to be worth far more than most any return you could expect to make. Not a fan of budgets, don't just buy things you can't afford, and use something like mint to track your purchases.
I saw the thumbnail and was like, "why would a Cuban be saying that?"
But then I realized it was just this mook who has a country for a last name.
You're a fool.
johmedis Okay.
CadaverJunky8
Sorry. That was a bit harsh.
You're a cabbage.
LOL!
Ohh my gosh! I said exactly the same thing about bidding on job creation to my friend a few years ago. I'm so excited to see that someone thinks alike. I also think diversification is stupid- far better to just pick the right investment instead of the shotgun approach. Keep telling the truth man. Completely agree !
The theory of portfolio diversification is a textbook approach into minimizing your portfolio's risk. Unless you have a strong belief that some stocks will generate a risk-less return then you should diversify your portfolio. My portfolio is well diversified and I've been able to maintain an average of 10.4% return for the past 3 years.
Holding everything in cash, awaiting volatility to give you the opportunity of a lifetime to "buy the dip," is a terrible strategy, by which, in the long run, one is likely to have found oneself having sat out of many of the gains one else would have enjoyed.
You sound broke.
Worst advice ever. He's a good businessman, but obviously knows little to nothing about wealth management.
+Janoy Cresva hhhh
+Janoy Cresva right??
how does one maintain billions of dollars while knowing little to nothing about wealth management?
The difference here is in the amount of wealth one has. He can manage this way because of the amount of wealth he has.
Midwest Dago so how did he amass the wealth to begin with?
Diversification is for people with money that can afford it. If you’re starting from the bottom you have to F.O.C.U.S (Follow one course until successful)… THEN you can diversify.
Advice from Cuban versus Bogle, Munger or Buffet? I know who I would take.
Great interview that most will not understand. Cuban speaking much truth.
As a business owner and professional investor, I completely agree with Mr. Cuban. Fortunes are usually created through concentration opposed to diversification. Mark Cuban made his fortune during the tech boom. John Rockefeller made his fortune in oil. Henry Ford made his fortune in automobiles.
While it is true that holding cash isn't an effective recipe for growth, at least you aren't losing. All investments involve risk and your average family man shouldn't be pressured into taking unnecessary risks. Remember, 90% of the investment public loses. This includes the "buy, hold, and diversify" crowd. - David Trungale, Tradertours Owner
+tradertoursdotcom Great comment!
+questionthefuture Thanks
Hope you get this. Total neophyte here. What about buying and holding the market (SPDR)? Doesn't that, historically, offer very consistent positive return?
+Kaddywompous It is true that over a multi-decade period, the S&P and DOW have historically gone up. However, there always will be bear markets. During the Great Depression for example, the markets took almost 30 years to recover. Cash should always be part of your portfolio regardless of your investment strategy.
+tradertoursdotcom 90% of TRADERS lose. Most people consider themselves investors when they are actually trading/speculating. Many people confuse a great investor/business with a bull market too. He sold a company that doesn't even exist today.
THANK YOU MARK CUBAN! He's absolutely right about the copyright system. We need to blow it up.
when i hear him speak, i feel very ordinary. he is brilliant
One of the best videos I’ve ever seen
Because we all know that cash, especially sitting in a savings account, has historically outperformed stocks. Worst advice ever, right next to his "borrowing money to open a business is for idiots."
Btw never never never buy a stock that doesnt offer a dividend. Dividends are where it's at
Buying and holding isn't a crook of shut but I get some of his points
This is very interesting!
I think what he means is that when you are beginner at investingin the stock market, you should focus on only one or two stocks at a time so you become very familiar with their fluctuation patterns. Basically you become a specialist in those 2-3 stocks. But once you become wealthy, you can expand or "diversify" to other stocks to increase your chances of staying in the positive. Obviously , you need to invest in the right companies so that your portfolio will always look something like 80% gains 20% loss. The losses don't matter if your gains outweigh them, its basic math. I'm an amateur trader and seem to have a natural talent at studying fluctuation patterns. I just love numbers.
He is right on the money with the current patent litigation culture. If we can reform the way that IP is handled and how it is enforced, we can drastically improve the entrepreneurial environment for companies big and small.
Stocking up on products in bulk instead of looking to invest is simple yet brilliant advice.
Awsome work
Says a guy who invested in basketball, tech Industry , entertainment tv, and within that show and diverse amount of industries
I can apply Mr. Cuban's advise to fit my budget, but as a new entrepreneur I'd give anything to sit down with him, and pick his brain for an hour at least. I like the fact that this guy seems authentic and will tell it to you straight. Just one hour 👍🏼
I completely agree with Cuban. Buy and hold is ok if you think your stock is going to keep going up. With every investment, there is a good time to hold the stock and good time to not hold the stock. Don't just hold on to something if it's bad and you just want to wait it out. Making money in the stock market is about making correct 50/50 decisions. At what point do I pull my money out and put money in? Research the stock, at least look at a few recent headlines and averages and see why the stock is up or down. I just bought Annie's (BNNY) today because it dropped 8% but only because of a shortage of wheat. That's a temporary problem that will fix itself shortly and will recover easily.
Mark Cuban is the man. If you know what to invest in diversification is stupid. However diversification reduce risk.
"Do not store up for yourselves treasures on earth, where moth and dust destroy, where thieves break in and steal. But store up for yourselves treasures in heaven, where neither moth nor dust destroy, and thieves do not break in and steal." -Jesus
Ethan Lintemuth Blahblahblah. Nonsense.
Ethan Lintemuth Amen. Matthew:6:19
It doesn't mean you shouldn't build wealth or be productive. It means you should invest as much as you can in things that are truly valuable.
+Ethan Lintemuth So how come Donald Trump is going around saying that the bible is his favourite book?
You could answer that simple question. But I will indulge. As the bible puts it, some people are hearers of the word but not doers of the word or hypocrites.
No one lives completely up to their word, their own set of morals, or Gods word. That's the reason that those who believe in Christ are saved by GRACE.
The bible doesn't change no matter what Trump, or any Christian does.
Genius! Never knew I had this much in common with Mark.
The easiest way to make money is to buy a house, rent it out and let the renter pay for the house while you live in a trailer park or with your family, then once the house is paid for… keep renting it out and buy a second house which will now be financed by whoever is renting the first house. Rent out the second house as well, keep living low cost don't buy bullshit luxury items to stroke your ego and wait until the second house is paid off. Now you have 2 houses paid off. Now buy a third house by renting out the other two houses. It will be paid off twice as fast. Keep doing this until you have enough real estate to never ever work again and have other people generate your income. Imagine having 10 houses paid for and renting them out. The more assets you have the faster you can pay off another mortgage the richer you'll get exponentially. And most important of all, then you can finally buy things cash and don't have to worry about liabilities and interest.
TerrorJesus sounds good
it simply takes patience. A lot of people wanna get rich fast. This is a pretty safe way to get rich… it's slow but it'll get you there. :)
TerrorJesus With your theory you will make $400K every 30 years. You will live in a trailer for 80 years and still be broke. PASS!!!!!!!
John Rambo sure, if compound interest didn't exist. Fortunately it does exist. :)
TerrorJesus It's not compounding for shit at .8%. LOLOL.
Speaking on risk and diversification, I think he is spot on. People are taking the wrong message from what he is saying. There is a tendency for investors to over diversify to a point where you do not know everything about every company in your portfolio. There has been multiple studies done where it shows holding just 4 different positions reduces most of the risk, I can't remember what the figures were but its well documented.
Diversification is not to reduce market risk because in a "efficient" market like the US, if the S&P goes down everything else will likely go with it unless you find the 1 or 2 safe havens whether its municipal bonds or whatever. I think the purpose of diversification is to reduce unforeseen risk like a missing Malaysian airlines, or a natural disaster that takes out the headquarters of a business.
he's basically just saying resist the animal spirits of the markets and don't invest in something that you don't know. Not rocket science, however even with this - luck is a huge factor.
Good interview
well diversification would be for idiots when they are not prepared to lose. But when you're Mark Cuban, you can be ready to lose when you're a friggin' Billionaire.
I wish I understood all of this. I'm desperate to learn everything I can about the business world especially from people like Mark Cuban but I don't understand 90% of what they're talking about. I'm trying to find a good spot to start learning and go from there.
Take both,
Mark Cuban's
Warren Buffet's
Wealth and I guarantee you that Warren can rebuild to billionaire. Mark Cuban maybe a millionaire.
Buffet understood the long game at a young age, and even if you ask him he was the right guy in the right place at the right time. I'd say that if you did that, Buffet would be more likely to die happy, but he simply doesn't have enough time to build back to billionaire status using the system that got him where he is today.
Richard Peach correct!!! Warren Buffett invested in a time where everything we use today was basically being invented. It took him 10 years to make his first $100,000. I made that in three months in crypto. I wonder if that means I'll be a trillionaire lol...
How'd you manage that? Day trading, trading between alt coins, or got lucky in the boom ?
Very intelligent takes by Mark. For those that don't follow and continue to push for diversification. To paraphrase mark, "hey if you are an average Joe, you can't compete with the programming software and knowledge Walstreet relies on to make money on funds etc. Save your money and invest in what you KNOW will likely return money (ie if you are a pharmacist and know of great company invest, if you are a tech guy and know in a company that is likely to succeed invest or if you simply love what some company is doing and believe, invest etc). He doesn't believe in investing in a bunch of different things and getting a small return in the future." I agree. If you are confident in your decision making, go for it. If you are just diversifying because it's the hip thing to do now, well GL.
Cuban here is talking about diversification in the academic sense. ie buying hundreds of stocks or simply buying an index fund which is terrible mistake if you want to obtain above average return considering the index is the 'average'.
Considering the fact that 96% of professional institutional fund managers fail to match the return of the market, and the 4% who do are not the same ones who did it last year then NO the market return is not average, it is a rate of return that very few people are smart enough to get out of their own way and take advantage of.
wulf67 No, thats because of high fees,transaction costs and taxes. If you combine all the portfolios of all fund managers the return on it before costs has to be the same as the index because it would in itself be an index. And look, i think an index fund is probabaly the best way to invest for 99% of people. However, you can't expect to make say a 12% return compunded over decades by investing in a index fund so if thats what you're aiming for it would be a mistake to diversify that's all i'm saying.
Sam Li 1. They fail to match the returns of the market also because the human mind is prone to irrational decisions and news occurs on a random basis. 2. Anything can be an "index" but "the market" is not the same as any index. 3. If you expect to make a 12% return consistently "over decades" then your expectations are unrealistic. How can you expect to make rational investment decisions when things get crazy if your entire concept of reality is so distorted to begin with? 4. We DON'T KNOW what is going to happen in the news that could wipe out returns for any company, industry, sector, region, or asset class. The wise investor recognizes this fact and diversifies, not just his stock holdings, but diversifies across sectors, across markets, across asset classes, and across time.
wulf67 lol, not here for an argument. Warren Buffett is the best investor of our time and he doesn't believe in diversification either.
Sam Li If you look at Berkshire Hathaway's holdings you will see that Warren Buffett is well diversified across companies, industries, sectors, and markets. That's why I am not worried about having almost 8% of my portfolio in BRK.
Thank you for this wonderful video about investing
Yeah terrible advice
I invest, he's sneaky with his words. He says don't diversify but then when he talks he is all over the place, Australian market, bonds, sports, ect. Translation, invest in what you do heavy research on. In short, what any serious individual investor does! Know what you buy into before doing so and why (i.e. keep a journal of date of purchase, how much was paid and why you bought it).
+Samuel D. EXACTLY
Samuel D. I completely agree with you on that one.
Anyone who got lucky in the dot-com bubble era is somehow an instant financial guru
Title is disastrous
Being successful doesn't mean you're always right!
Diversification is just diversification it's not bad nor good, you be the judge
Kang Li stockquotes
Yf
He makes valid points though. Ideas are worthless if you can't execute on them correctly and well.
disagree with his investing methods, I will go with warren buffet or John C. Bogle aka buy and hold
"know what you're investing in" is not just an investment method, it's a particular application of a more general principle: "rely on your own judgment".
If you have capital, it's a safe bet that you earned it by relying on your own mind. I doubt you accumulated savings by stocking shelves at Walmart, you must've earned that money through some kind of intellectual effort (or the person you inherited it from did).
But now, all of a sudden, you want to make more money, without exerting any of that effort? You really think that'll work? You really think you can create wealth without being creative or productive, even though thus far, you had to earn everything you have?
Trust me, you can't. No one can.
anomy safad lots of ppl destroy the market, even with little research. ha, i've seen a piggybacker who made 75% annually from 2003-2013. and, there is a well-known pro piggybacker who beats the market - Mohnish Pabrai!
anomy safad how the hell am i supposed to name a million ppl? i could name maybe 30 investment managers that beat the mkt and point to another hundred individuals. buy&hold is complete crap. if your assumption is that stocks as a whole go up for 30 yrs, why not buy a leveraged index ETF? there you go, secret formula to beating the market revealed!
buy cheap and never sell lol
anomy safad
It`s possible, I`ve seen an interview with a guy who rely on intiuition and looking for trends. He has made profits 10000%
Great advice
He doesn't understand investment. He's a trader.
Bryan Wheelock and your the billionaire I take it?
Wut? Shark tank's premise is providing investment capital.
great interview
Screw diversification and buy and hold strategy? Oh really? Go and argue that with Warren Buffet, the 4th richest man in the world, who employs all of those strategies.
yeah it's a bit iffy isn;t it. but then there is alo the bit where he says something like, " that works great for Warren because he can put 7 billion into a company but that doesn't work for the average joe" but if Buffet has been doing it from the start then yeah. The thing that Buffet always alway always talks about is real assets that generate passive income which is kinda important it seems. and yes i am a newbie
If you look at Buffett's early life he wasn't diverse at all. He's only diverse now because of shear size.
Leggo My Ego hmm. thats interesting. makes sense though with the way he talks about investing in companies that have steady growth and profit and just well managed companies i guess. it seems like he saying it really is possible to pick a winner.
"Diversification is protection against ignorance. It makes little sense when you know what you're doing. "-Warren Buffet. Warren doesn't diversify. He is a fundamentalist value investor who looks to make large acquisitions with substantial percentages of his portfolio. He values a business and buys it on sale. When he tells the average investor to diversify its because he knows the average investor is ignorant and lacks the emotional fortitude to stay committed to a single company.
Herbert Koehler Exactly. However, diversification is thought in university as supreme law, which pisses me off.
Mark was in the right place at the right time when he started online. If it was not him at that moment in time. it would be someone else we would be listening to today.
It's easy for Mark to put all his eggs in one basket and risk loosing a fortune. Most people can't afford to take that risk, that's why diversification is great way to hedge your investments.
Nice hearing his views on investing!
Shockingly ignorant and shockingly arrogant to boot!
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Being flexible with a solid base of ethics is how you run a business. Having foresight and being able to maneuver through the markets while maintaining established core principles. In other words the costumer is always right to the extent that they are not able to manipulate you.
Proof you don't need to be smart to be rich.
Insightful 👁
This guy is a chump. The fact that he has money only makes him worse.
Everyone is hating on Cuban. Even Buffet said the same thing. Put money aside, save save save, and take advantage of a down market. It’s so simple. Idk why anyone is hating. Buffet said fine 3 business that are not going anywhere and invest in those 3. Vs 50 stocks spread out.
I have my eye on 3 and I’m invested up 73% in 3 months. And I’m watching one more because I love what direction it’s heading. Not dumping too much money yet until I see it grow outward a little more.
But I’m not sure on the toothpaste thing, I’ve tried to buy bulk but you’re not saving much money. The reason poor people stay poor is because they don’t have cash on hand for opportunities.
Government funding is stolen money, we cannot progress with tax money backing any risky venture. That is absurd. Capital constraints are created by taxation to consumers who are robbed before having the opportunity to allocate their capital. Really lost alot of respect for Cuban today.
i actually agree with mark on this one. Study, pic something that is good and make it work.
Applauding myself after a year of consistent dedication and growth, investing 40% of my pay monthly into ETFs and Index funds, I can boast of $135k in profits so far. Cheers
Wow that’s great, but I feel anything stocks is quite risky if you not experienced in risk management, how do you cross that line
there’s no magic there, every form of business or investments involves risks but I work with an expert trade analyst so it is a lot easier, you can look him up if interested. Eddybruke .info
That's hot
How's it going now?
Such a great video, thank you for your wonderful insights Mark. I feel like we are very similar and would totally get along as crazy entrepreneurs that make it happen while young!!!
are you making money off the Mavericks....... Cuban: "I can't talk about it." If you can't talk about it then why are you giving "any" advice...... C'mon man!!!!!!!
"Buy and hold is a crock of $%^%$#@" LOL!!! Uhhh Warren Buffet, Peter Lynch, and Bill Ackman, "buy and hold" is the foundation of their investment thesis. Boggles my mind how someone so rich can say something so careless.
Here's the problem with cuban, and honestly until i saw this he was my favorite shark on shark tank... He MUST win... If he can't win, and he knows he can't win, he wont play. With stocks, he can't always win, so therefore he refuses to play. Stocks are a give and take of win/loss. Somedays you win, other days you lose, the goal is to have a ratio of more wins to loss. Cuban knows that the market is outside the scope of his interest, and research capacity, therefore he refuses it all together...
Cuban, dont throw the baby out with the bath water. Diversification IS not for idiots, its for a seasoned investor that understands that diversifying mitigates risk. Cuban, i think you are a great CEO, but a horrible investor(based on what i saw in this video).
Mark Cuban didn't say cancel the whole patent system. he's saying the system needs more supervision and controlling, because suing people has become an american culture that hinders entrepreneurship, and without entrepreneurship there will be no job opportunities. that's what cuban was explaining
But also note Mark has much more capital to make things happen.
Great guy
Laughing Out Loud! Mark Cuban just gave the worst advice ever! So bad I forgot about lol!
Just finished listening to Kevin o leary's interview... his closing advice was "diversification". lol