Buy What You Know: One Principle of Successful Investing

by Floyd Saunders, Founder at Really Simple Investing

Buy What You Know: One Principle of Successful Investing

Are you interested in investing but feel overwhelmed by the complexity of the market? Look no further than Dave Gretta's book "Night Trading" and his common-sense approach to investing.

This episode of Really Simple Investing podcast is filled with valuable lessons and insights for investors of all experience levels. Dave Gretta wrote Night Trading to provide would be investors ideas about preparing for trades in the stock market at night, after you have finished your day job.

This unique book about learning how to invest in the stock market is worth the price of admission and will be relevant and useful for years to come. Dave has thirty years of experience in investing and a wealth of skills in technology, finance, and accounting

As a former accountant and trader, Dave appears frequently on podcasts and his Twitter Spaces show to discuss his approach to investing and his book. Dave emphasizes the importance of having a strong foundation in accounting and reading financial statements. He also shares his investing style, which includes 70% of his portfolio in dividend and dividend growth stocks, 30% in swing trading, and a CD earning 5.4%. Dave advises against leaving money in a bank account and recommends investing in brokerage CDs instead.

Listen to the podcast:

Current Market Conditions

We also discuss the current market conditions and the importance of being cautious and paying attention to indicators such as the Warren Buffet indicator and the Schiller PE index. Dave believes in investing in solid companies and looks at everything, including earnings, price-to-earnings ratio, price-to-sales ratio, and the balance sheet.

As Dave says, "Investing is complex, but it doesn't have to be complicated."

Dave's approach to investing is based on common sense and a thorough analysis of the companies he invests in. He believes that investing is complex and requires education and a long-term perspective. By following these principles, investors can increase their chances of success and avoid common pitfalls.

Dave's investing style is grounded reading financial statements. He invests 70% of his portfolio in dividend and dividend growth stocks, while the remaining 30% is in swing trading and a CD earning 5.4%.

In a recent interview on the Really Simple Investing Podcast, Dave recommends investing in solid companies with a focus on dividend and dividend growth stocks, as well as swing trading.

"The key is to get more shares...you accumulate more shares over time." -

Dave Gretta

Dave also stresses the importance of being cautious in the current mar

ket conditions and paying attention to indicators such as the Warren Buffet indicator and the Schiller PE index. He emphasizes the need for investors to be consistent in their approach and not to sell stocks too quickly.

Buy What You Know

One of Dave's favorite principles is "buy what you know," and he extends it to "buy who you know." He believes in investing in companies with a strong balance sheet, earnings, and a stable payout ratio.

Investing is complex and requires education and a long-term perspective. By following Dave's principles of consistency, managing risk, and having the right mental attitude, investors can increase their chances of success and avoid common pitfalls.

So, for those looking to invest in the market, take a page out of Dave Gretta's book and focus on the long run with a common-sense approach.

Author Dave Gretta will tell you how he made huge returns investing in things that surround him in his daily life―and it's not the obvious things you would expect! Investing in things you know was just one of the topics I talked with Dave about in his interview on the Really Simple Investing Podcast.

In addition to being an author, Dave is a “technology enthusiast” who relishes new technologies, and learning how to have the right mental approach to stock market investing and even how sports psychology can factor into picking winners.

The author also chronicles in detail his real-life IPO investment in private aviation company Wheels Up.

This unique book about learning how to invest in the stock market is worth the price of admission and will be relevant and useful for years to come.

He advises against leaving money in a bank account. Dave's approach to investing is grounded in common sense and a thorough analysis of the companies he invests in. He believes in investing in solid companies and looks at everything, including earnings, price-to-earnings ratio, price-to-sales ratio, and the balance sheet.

Market Timing

When it comes to market timing, Dave acknowledges the seasonality approach but prefers a buy-and-hold strategy for the long term. He also discusses his principle of "buy what you know" and extends it to "buy who you know" in his book.

"If you go back to 2007, just done nothing but hold your investments, which is really what I did and just didn't panic didn't sell didn't even really buy that much and just held onto your positions you probably would've done better than 90% of people." - Dave Gretta

He also believes that cash is not trash anymore, especially with the current market conditions. Dave is currenting holding his cash position in a brokerage CD to get a higher interest rate on his money. Right now, he feels it’s tough to find stocks with returns above the 5.4% he is getting with his CD.

Dave emphasizes the importance of consistency in investing and managing risk. By having the right mental attitude and a long-term perspective, investors can increase their chances of success and avoid common pitfalls.

Dave recommends reading investing books, including his own, which he believes offer the best risk-reward for the money.

"Investing is complex, that's what I would leave it with, and you need to educate yourself and you don't need to spend a lot of money to get educated." - Dave Gretta

Follow Dave on Twitter at @DGretta_Author. Contact Dave at Nighttrading@outlook.com.

Key Words

Night Trading, investing, accounting, trading, dividend stocks, swing trading, S&P 500 index fund, Warren Buffet indicator, Schiller PE index, market timing, buy-and-hold strategy, dividend yield, Genco Shipping, dividend reinvestment program, sports psychology, consistency, managing risk, Mark Minervini, Trade Like a Champion, investing books, Floyd Saunders, Really Simple Investing Podcast.