Takeaways from Under The Bamboo Tree with Emmet Savage

6 Golden Rules to Making A Million Dollar Portfolio

The First Million is the hardest, however, it only takes one good investment to change your life.

1. Get started. Start investing today. The earlier you start the more time you have to reap the gains.
2. Think Long Term. Years and Years. Decades & Decades.
3. Never borrow money to buy shares.
4. Diversify: Aim to buy at least one stock a month. Don’t put all your money in just one stock but your portfolio shouldn’t have more stocks than you can easily track
5. Buy what you believe in.
6. Invest what you can, when you can.

These sectors can help expedite your wealth:

1. Software as a Service
• These companies have recurring revenue.
2. B2C companies.
• These are companies that sell their products directly to consumers and when the consumers love it, they will stick with it no matter what.
• Emmet is up 2089% on Chipotle
• He’s up 19,022% on Netflix

A sector that is flying under the radar is REIT (Real Estate Investment Trusts)

• NYSE: ESRT: This stock is currently being beaten down by the pandemic but it still has $1.4 Billion USD in cash. Before Coronavirus, it traded at $22, now it’s trading at about $6 so Emmet is really keen on it.
• Emmet likes SPAC’s, but the problem is that you invest in them without knowing the company they intend to acquire, so you are “backing the jockey instead of the horse”.

The Best Performing Stocks in Emmet’s Portfolio

• It only takes one good investment to change your life and in Emmet’s case it was Netflix
• The average holding time for his best-performing stocks id 8 years
• Think long term, because the shorter the time frame, the harder it is to predict the performance of an investment.

Stock     Return
Netflix     20,000%
Tesla        2,104%
Chipotle    2089%
Shopify     1084%
Disney       956%
Zillow         924%
Facebook    917%

When to sell? – Emmet says Never

• Very long term buying and holding is the path to wealth building.
• He believes that all his investment mistakes are because he sold one stock or another.
• You should put in 95% of effort into researching before you buy.

Never Sell, Unless…

• The company has made a bad change in its strategy.
• Its management has lied. The only stockEmmet has sold in the last 3 years is Luckin Coffee and that’s because the management lied.
• You can also sell if you no longer believe in the company.
• If you buy a good business out to change the world don’t sell.

What are you buying ahead of the next 10 years:

1. There’s always a great investment.
2. Find a business that today looks like Netflix did years ago.
3. B2C & SaaS:
a. NASDAQ: TDOC 
b. NYSE: KO 
c. NASDAQ: ETSY 
d. NASDAQ: PTON 
e. NASDAQ: PINS 
f. NASDAQ: HAS 
g. NASDAQ: STNE

When To Start Investing?

• NOW. The best time to start is today, the next best time is tomorrow.
• Don’t let fears of downturn stop you, because, nobody can predict a downturn.
• However, you shouldn’t go all in at once. Buy a little at a time and go in bit by bit

Stocks he’s currently selling:

• None.
• Remember you only lose, if you sell. You’re never wrong until you sell.

Toss or Keep:

Electronic Vehicle Companies – Keep as a whole

Tesla – Keep. He believes Tesla will be the greatest company in our lives.

Nikola – Toss

SOLO – Keep.

Virgin Galactic – He loves it. Keep. Buy and never sell it.

Pharma Companies- Toss

• 170 companies are working on a COVID vaccine. 9 of them are in phase 3. The chances of picking a winner are stacked against you.
• He avoids Banking and Pharmaceuticals because they are too complex.

Moderna – Toss

INO – Toss

Novavax – Toss

Big Tech – FAANG – Keep. The big get bigger

Etsy – Keep

Nvidia – Keep

JP Morgan – more of a toss. But not certain

Shopify: Keep

Twillio: Keep

Own for:

A day – The S&P 500

A week – The S&P 500

A month – Google because you won’t lose a fortune, won’t make too much.

A Quarter: Atlassian

A year: Teladoc

10 years: Teladoc followed by Disney

Other Tips For Starting Out

• OWN THE S&P 500, with ETFs such as VOO. Start with it then layer things into it.
• The bedrock of your portfolio should be a company that’s so big, that could be around forever.
• Dividend investing is great if you’re already rich. It is more about preserving wealth rather than building wealth.
• If you own a stock that pays dividends when it pays, you should reinvest the money back into the company.
• A diverse portfolio should have between 20 to 30 stocks

More Resources:

• Learn by MyWallSt
• Stockclub podcast by MyWallSt
• Horizon