It is believed that we individuals feel the pain of loss twice as intensively than the equivalent pressure of gain. Is it any wonder that people are so loss-averse when it comes to investing?
So, how do you minimise losses in investing? One of the best ways to do this in my view is to avoid toxic stocks. If you want to prevent large scale wealth-destruction, then you should stay away from toxic stocks as far as possible.
Please check out the video to know more about these stocks and how should one identify them.
Rahul Shah (Research Analyst), Managing Editor, Microcap Millionaires has led the team from the front in developing some of our most stringent and rewarding research processes. As per his own admission, the turning point in Rahul's life as a financial analyst came a few years back when he got introduced to the works of Warren Buffett and Charlie Munger. From Buffett, he understood the value of investing in good quality business with powerful moats and strong management teams. Charlie Munger on the other hand inspired him to be a lifelong learner and use mental models in order to arrive at the crux of matters across most disciplines. Rahul firmly believes that in order to be successful at investing, you have to do the big things right and possess a great temperament and a contrarian streak.
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