Can you get rich from trading or investing in only one stock...well my
entire account was all in on tesla stock So yes i was rich as %^&$
then this happened yeah true story I was a millionaire
until elon tweeted I survived elon's tweet and all I got was this lousy mug.
All jokes aside, profiting from investing
in only one stock this is really against the traditional investing tips from
legendary investors like warren buffett however we have seen individual
investors putting all their money into one particular stock and saw some pretty
outrageous returns remember the recent wall street beds movement in 2021
remember that many retail investors stand out as gamestop and amc stocks go
from double digits to rallying thousands of percent this is almost as if you went
to sleep on earth and woke up on the moon today we're going to explore this
idea and answer if it's possible to make a living or get rich trading or
investing in just one stock and if yes what's the best way for us to do so
actually just let me answer this question for you right now yes it's
possible to get rich by just destroying that like button just do it and you'll
wake up rich on the moon tomorrow and hopefully elon will never tweet again
let's start approaching this topic from an investment standpoint shall we be all
into one stock and cross our fingers that will eventually get rich
when investing long term we often hear this phrase diversification
make sure you diversify your portfolio so you don't put all of your eggs in one
basket because if you do so guess what happens when the basket breaks that's
right you have scrambled eggs but not the delicious kind from ihop but the
greasy powdery kind from the high school cafeteria there are actually many valid
reasons to diversify your diversification in investing means
having your capital allocated into different asset classes such as stocks
real estate cryptos or bonds and in different industries such as tech
consumer stables and financials imagine if you were only invested in a single
stock in a single sector in tech during a 2000.com hype well then you probably
weren't broke when the bubble bursted many of the technology stocks went
plummeting down some did survive however they are now the tech giants in today's
technology sector such as apple amazon and google it's because of investment
bubbles going burst like this conventional wisdom tells us to
diversify our portfolio so that just in case a stock or a single sector crashes
we just lose some but not all of our hard-earned money for most investors the
easiest way to achieve diversification is to invest in index funds essentially
you could own baskets of that say 500 different companies in one stock for
example if you own the stock voo vanguard 500 index fund etf you are
investing in 500 of the biggest companies in the united states
basically this is a fund that tracks the s p 500 within this fund you are
diversified in different industries such as technology health care consumer
discretionary and many many more so now that we know for most investors
diversification is a good idea since it limits the risk of losing a significant
amount of our portfolio this does beg the question can you get rich from
buying just one stock i mean do we have to diversify all of our money that much
after all we have heard about over diversification leads to average returns
and billionaire investor mark cuban once said specification that's for idiots
right because you i know right he's only worth 4.5 billion
dollars but is he on to something what if you had just put one thousand dollars
into amazon in october 2000 when it was trading for only six dollars a share
now you would have around five hundred thousand dollars and you'll also be that
annoying person at the parties the same is true for a lot of popular stocks such
as tesla apple even gamestop and moderna my favorite stock of all time and my
favorite vaccine to take but like i previously mentioned in a
video revealing my investments i do invest heavily into one particular
sector which is real estate and if you look at the percentage allocation my
money is actually not that evenly spread out or diversified into different asset
classes as for stock market investing and much more diversified present day
with most of the capital in index funds for the s p 500 tech financial and
energy dividend etfs in canada however the original capital i built up for this
stock investment and also where i had the funding for my day trading account
were not from these diversified stock investments a substantial portion of
these funds were in fact from the profit as a result of investing in highly
concentrated individual stocks since 2013 and 2014.
like i mentioned before in this video before i quit my job to become a
full-time day trader i was actually a vfx artist working in the film industry
i have a bachelor's degree in film and computer graphics and it's from my four
years of college that became very familiar with all the softwares the
booming film and gaming industry heavily relies on yes i'm talking about nvidia
chips to render out all the images you guys see on the screens as well to
produce a real time rendering in gaming the high quality of 3d rendering you see
today would not have been possible without a technological breakthrough by
companies such as nvidia autodesk and adobe and it is specifically these three
stocks and them only that i started my investing journey and they paved the
foundation for me in my early 20s i didn't have much to start as a broke
college student but i started with just 100 a month and slowly increased to a
couple hundred per month to a couple thousand i was buying nvidia at the
split adjusted price today from four dollars to twelve dollars adobe from
sixty dollars to seventy dollars and autodesk around 50
i have since then sold all these individual investments and started
diversifying these profits into real estate and index funds but without these
initially super concentrated investment profit i would have significantly less
today now looking back to more than eight years ago i did not invest in
nvidia autodesk and adobe thinking that i would just get rich quick from these
growth stocks i simply invested in them because i use their products every
single day and i truly understand what they are capable of and how the demand
has grown so substantially just during the four years when i was in college
okay yes i know i did not exactly invest in just one stock and got rich from it
but i did invest heavily into a single industry computer graphics technology
because that's why i understood well the most recent time i invested heavily in a
single stock again was in 2019 namely tesla from the 75
split adjusted price and now it's the biggest weight in my individual stock
holdings along with apple stock so apparently you could get rich from just
one stock okay maybe i didn't get rich but i did get substantial financial net
worth boost from just one stock however i'm not saying everyone should go out
there and put all their money into one specific stock or a single sector like i
did if you are an expert at an area you see the growth and use of products from
a few very specific companies like i did there might be your opportunity right
there to achieve above average returns however i do think it's a good idea to
diversify eventually once you've seen these concentrated investments go
hundreds or thousands of percent to the moon that's the reason i move these
profits into index funds real estate and for day trading on the other hand if you
don't think you are an expert in any highly specialized and growing industry
i would not recommend investing in just a single stock or a single sector and no
reading other people's research and analysis online on wall street bet
reddit twitter youtube or tick tock does not make you an expert that might have
worked in 2021 but it's probably not sustainable long term the same can be
true with trading a single stock when we think about the world's best athletes
musicians ballerinas surgeons they thrived because they have spent their 10
000 hours on repetition and doing the same practice every single day over and
over again until they find perfection the same analogy can be made with day
trading your repetition and experience in trading one stock can make you a
master of the stock's price action and lead you to greater success over time
you will have familiarized with the stock's prior support and resistance
levels you will know how its price action reacts to various volume key
levels and event catalysts and that's the reason many times i will have one or
two stocks i love to trade almost every single day for a few months that was the
case for amc in the summer of 2021 i loved longing and shorting the stock
to the moon and back down to earth and get the same thing while i'm trading
mvacs and mrna in 2021 as well until my journal stock burned me alive when i was
loneliness turd so now i'm shooting every single bounce to the ground and
currently in 2022 in a downtrending environment my go-to stocks to trade
every single day are amd and nvidia i trade both of these names long on the
market rally days and when the market is down or going red i will shoot them and
hop on the ride to no bound city most new traders will find the most success
focusing on just a small piece of the puzzle and repeating that over and over
again that goes for practicing the same setups and practicing on the same stocks
i'm not saying this for you to trade exactly the same stocks as i do but
rather to dig into your past data and find maybe one or two stocks that you
have a history of success with you need to be able to clearly read the stock's
price action and be familiar with the amount of risk the price and range
requires and as always risk management should always be your priority just
remember that time and experience are going to be your best teachers in the
stock market hopefully you guys enjoy this video and the bad jokes if you're
interested in learning more of my risk management strategies then feel free to
check out the humble trader community on my website thank you guys so much for
watching as always i'm the humble trader and i'll see you guys next time
[Music] [Applause]
you