Chase Rubin's Detailed Miami Investing Scenario

Investing is not for everyone. The stress and long hours of research, which might accompany a potential chance to enjoy passive income, tend to be overwhelming. Those unfit for such as fast-paced environment are often overrun by the sheer amount of work. Fortunately, there are some tricks of the trade that can ease the beginning of one's investing career and launch them into the world of specialists.

The biggest downfall of new investors is the emotional connection with their assets. For example, a Miami native may vividly denounce any talks of selling stocks from a local corporation that has been underperforming. Solely driven by the relatable background of the company, this investor is bound to let the value of their asset plummet. Such an endeavor is often supplemented by a rationalization of future success. Unfortunately, trying to make a living from investing yet getting overinvolved with the portfolio is not possible. Buying and selling are crucial parts of this career and, expectedly, knowing when to give up a drowning investment is a must. When a company is not meeting their sales figures and its value drops, the investor should read between the lines and part from that purchase while there is still room to make a fraction of the money back.

According to Chase Rubin, a private investor who is an expert on the topic, going after mainstream and trending opportunities is not optimal. The key doctrine of making money through a portfolio is "buy cheap, sell high". If the aforementioned company in Miami suddenly revolutionizes the world, which simultaneously skyrockets its stock price, going after it is useless. When the news of some company doing extremely well reach the public, thousands of other investors have already made their purchases. This generally implies that there are no good opportunities left and the only available assets will be the high-end ones. Buying those will pay the investors who were more timely with their decision and should be avoided. To better explain that scenario, consider the following.

Mr. Rubin gets an early information that an accounting firm from Miami is going public. During the IPO, he purchases their stock for $10 a piece. Two months later, this company creates a new tax-filing software that completely transforms the way taxes are done in the United States. This causes their stock to rise to $500 a piece in the first week of the new invention. During the second week, the general public and the media start focusing on this groundbreaking move. This facilitates another spike to their stock that is now sitting at $800, per se. At this point, a beginner investor decides that it is a great time to invest and buy 10 stocks of this business at the price of $800 each.

If Chase Rubin, who originally purchased 10 stocks for $10, decides to sell his assets to that investor, he will make $7,900 from the transaction which translates to an 80,000-percent return. That will surely make him wealthier while the new investor will probably never experience such a high return on this investment. The only way for the new buyer to get an 80,000-percent return is if the stock grows to $64,000 a piece. That type of growth is not only unlikely but hardly possible. In today's markets, competition tends to follow success and this company will soon have to share prosperity with other firms. That will put a halt to their stock growth. So, unless someone is an early buyer, people should generally not purchase assets after they became popular.

Although it is a cliche, knowledge is indeed power. If that hypothetical buyer from the previous scenario had the early information about the new accounting firm, he might have bought the stock sooner. The tremendous return that Chase Rubin generated would not be possible if he did not possess the resources to inform him about upcoming opportunity. This teaches that new investors, not necessarily from Miami area but everywhere, should dedicate time to research and gathering information. Only then can truly remarkable decisions be made.