what’s up believe nation I started the
mentor me serious with the goal to try
to learn from people who’ve done a lot
more than us hang around them a little
bit longer I’m by being in their
environment hopefully some of their
mindsets that release our way of
thinking seep into us to help us become
the best version of ourselves so today
we’re going to learn from Kevin O’Leary
and his investing rules mentor me Kevin
and as always guys as you’re watching
the clip if you hear something that
really really resonates with you please
leave it down in the comments below and
put quotes around it to other people can
be inspired and also when you write it
down you’re much more likely to lock it
in for yourself to enjoy
[Music]
you
diversification is the only free lunch
and investing and I see this happen so
many times here’s my basic lesson that
I’ve learned that I never very from and
this works
trust me works never more than 5% of
your portfolio in any one name no matter
how great the story is if it’s the next
nor tell if it’s the next rim who cares
5% Mac’s waiting for me usually it’s two
and a half to three percent I never let
a stock get bigger than that in my
portfolio I sell into the strengths all
the time
secondly never ever ever more than 20%
any one sector so if you love gold you
just can’t get past 20% of your net
worth and gold or energy or any other
sector or financial services so good
sectoral diversification is crucial and
finally for me I’m over 60% weighted in
debt now versus equity not government
debt not treasury bonds but corporate
debt remember that a BB or triple B bond
is service before they pay the dividend
on a common stock so I like to own write
up the balance sheet so I own a lot of
preface converts senior debt floating
rate notes I love that stuff because
when they get upgraded I get capital
appreciation meanwhile I get a check the
key to life is the check coming in it’s
the cash if you always always always
look at the free cash flow this will
keep you safe because the only friend
you’re going to have when you’re old and
crusty is not your dog not your kids
it’s the cash in the bank that’s still
going to love you in your book you also
say when you’re investing you should
have an element of fear in there you
should make the assumption when you make
an investment there’s some probability
you’ll lose it it will go to zero and
that’s why you need to have you know a
reserve like a back-up plan
some cash set aside that if everything
blows up you’re okay I find it
extraordinary when people make their
first you know liquidity event and they
have some capital that they blow it all
again that is the biggest mistake you’ve
got to take a nut even if it stays in
cash or it’s a very very liquid safe
securities to say that I don’t touch it
goes back to what my mother taught me
spend the interest never the principle I
mean look you know I make a lot of crazy
investments I don’t touch the principal
I’ve learned something a long time ago
for my mother you’re going to find this
fascinating when I was a seven-year-old
boy and she was working at that time she
used to take me with a bank to her every
Thursday that’s when they paid the girls
where she worked and she take 1/3 of her
paycheck and put it into bonds and
dividend-paying stocks she used to say
to my brother and I then boys never
spend the principal only the interest I
had no idea what she was talking about
but she was drilling that into my head
for a reason I think became very
important decades later after she passed
away I became the executive for her
state and I for the first time I saw a
secret account she kept from both of her
husband’s her whole life made up of
dividend-paying large cap stocks and
corporate credit do you have any idea of
the performance of that portfolio
she blew away every indicee I was amazed
that she was a portfolio manager she was
just a concerned mother that needed to
have capital no matter what happened I
started to do some research you may find
this fascinating over the last 40 years
over 70% of the market’s returns have
come from dividends not capital
appreciation
she must have intuitively felt that and
knew that that forever changed my
investment philosophy I’m a dividend guy
I only buy stocks that pay dividends
I’ll never buy a stock that doesn’t
return capital because the data tells
you not to unless you’re a masterful
stock picker and you know exactly when
to buy and sell you can’t my view beat
those odds 40 years 71 percent returns
that’s it for me dividends only I like
gold because in a way it’s a stabilizer
it’s an insurance policy you know I
listen to all the gold pundits and
they’re always wrong as far as I’m
concerned it’s possible to time the
moves I’ve owned gold for decades and I
simply have a 5% waiting I look at it
quarterly when it becomes more than 5% I
sell into the strength and when it
weakens I buy into the weakness it’s
just a stabilizer you know I’m not one
of those guys
going to go to 40% winning in gold I
don’t believe the hyperinflation story
it hasn’t happened gold is popular for a
whole host of reasons and 5% seems to be
enough it’s worked for me in portfolio
management it’s the only security I own
that doesn’t pay a deal
so Kevin I guess do you not care if gold
goes to two thousand or five thousand
dollars an ounce you’re still going to
buy gold yeah I don’t care like let it
let it run I’ll be selling into that
strength keeping a 5% weighting you know
what I’ve learned I’m an old crusty
investor when everybody’s saying you’ve
got to own it you should be selling it
because when it corrects it doesn’t
touch the sides on the way down so I
simply say 5% is good for me some people
like it 10 15 % waiting I’m a 5% guy and
I’m disciplined about it I hope it runs
to 5,000 I don’t care I’ll be selling
selling selling selling and selling all
the way up keeping it 5% and when it
corrects back down in 2000 leave buying
it in it’s fun that’s the way you should
work with gold never get so caught up
that you take all your dividend yielding
securities that are also a hedge against
inflation and put it into a commodity
like gold what’s the value of a stock
that never returns capital to its
shareholders I don’t know because the
only way you can make money is if
somebody else is willing to buy that
position at a higher price for some
emotional reason perhaps or for some you
know foresight that maybe the company
will return capital one day and I think
of it you know what when you learn as an
investor over multiple decades is the
only thing that matters is free cash
flow that’s it there is no other reason
to own a stock and with that philosophy
it brings you into a place where you
focus on the company’s ability to
generate incremental cash flow because
just owning a dividend paying stock is
not good enough because you know let’s
say we find a stock today that’s paying
a three percent dividend yield and
tomorrow because it’s forecast for sales
get cut in half the stock drops are 50
percent now it’s yielding six percent I
don’t want to own that stock either so
my tests in this index that you know
created with what see Russell looks at
the balance sheet every year we test to
make sure that the
company is viable in its ability to
generate cash this is extremely
conservative investing this is for the
long haul these tools are not for as
you’re suggesting for spicy you know the
hot stock does your I’ve done that I’ve
been there you know let the young legs
do I have zero interest in that I don’t
care what the hot new stock is you know
when a company comes public I won’t own
it either it’s got to prove to me over
multiple years that it can continue to
generate cash before it even fits in to
what I’m doing so I’m really boring and
I like it that way so a great company
doesn’t necessarily have to equal a
great stock they can be two very
different things from your perspective
there’s many companies where I buy their
products and services I would never
touch their stock so you know it’s sort
of we’re talking about real money here
the stuff that you need to preserve you
know when I think about my family trusts
I can’t afford to mess around with that
what investments are you making today
I’m liking very simple deals where I can
understand the business model give you
an example how boring and simple and how
successful we be this is from shark tank
you know I do I look at a lot of deals
on shark tank and on Dragons Den because
I use I invest five percent of my net
worth every year in venture deals so I
used to have to go find them now they
come to me I’ve got two platforms to
work on this is a shark tank deal so
Oprah has a hairdresser interesting guy
he’s uh his hobby was tee this team you
drink and he became what’s called a nose
he had a certain skill to be able to
smell salon teez blend them one day he
gives couple years ago a cup of tea to
oprah well he’s doing her hair and she
sips it and says as best you ever had
she goes on the show half an hour later
and says this tea called Talbott teas is
the best tea I’ve ever had he gets
orders the next day for five hundred
thousand dollars you know the Oprah
effect you’ve heard of it right he can’t
finance that so he comes on Shark Tank
and he’s looking for $250,000 and I
agreed to buy 35% of the company
I love tea it’s so simple gets on Oprah
500,000 orders Neiman Marcus all kinds
of individuals bordering on the internet
simple tea orders cash flow right while
we’re in the middle of doing the deal
the show airs and Jemma juice a public
company says we want to be in the tea
business we love this story we love the
brand I want to buy the company
I haven’t even written a check yet and
bang the deals done Wow yes Wow that’s
the kind of deal I like because it was
simple it’s not a complicated text story
its tea tea with a brand now you go into
a Jamba Juice anywhere in North America
that’s my tell the tea’s that’s right
isn’t that wonderful is wonderful that’s
all you are well that’s why I am it is
but you know I look at it this way the
simple deals are the ones you make money
on so I take that cash back Irie deploy
it so I like simple stories with revenue
attached to them
you know the high-tech stuff I came out
of that market it’s so complicated so
much can go wrong so I just love deals
where they see an easy path to revenue
so thank you guys so much for watching
I’d love to know what did you learn from
this video what clip spoke to you the
most and what are you going to take from
these clips and immediately apply to
your life or to your business somehow
leave it down in the comments below I’m
super curious to find out finally you
want to give a quick shout-out to the
lonely bookaneer thank you so much for
breaking up a copy of my book your one
word and for making that awesome youtube
video on it as well I really really
really appreciate your support and I
hope you enjoyed the read I definitely
think that this book is about finding
the core thing you want for your work
your life and your business so thank you
guys so much for watching I believe in
you I hope you continue to believe in
yourself and whatever your one word is
much love
mentor me serious with the goal to try
to learn from people who’ve done a lot
more than us hang around them a little
bit longer I’m by being in their
environment hopefully some of their
mindsets that release our way of
thinking seep into us to help us become
the best version of ourselves so today
we’re going to learn from Kevin O’Leary
and his investing rules mentor me Kevin
and as always guys as you’re watching
the clip if you hear something that
really really resonates with you please
leave it down in the comments below and
put quotes around it to other people can
be inspired and also when you write it
down you’re much more likely to lock it
in for yourself to enjoy
[Music]
you
diversification is the only free lunch
and investing and I see this happen so
many times here’s my basic lesson that
I’ve learned that I never very from and
this works
trust me works never more than 5% of
your portfolio in any one name no matter
how great the story is if it’s the next
nor tell if it’s the next rim who cares
5% Mac’s waiting for me usually it’s two
and a half to three percent I never let
a stock get bigger than that in my
portfolio I sell into the strengths all
the time
secondly never ever ever more than 20%
any one sector so if you love gold you
just can’t get past 20% of your net
worth and gold or energy or any other
sector or financial services so good
sectoral diversification is crucial and
finally for me I’m over 60% weighted in
debt now versus equity not government
debt not treasury bonds but corporate
debt remember that a BB or triple B bond
is service before they pay the dividend
on a common stock so I like to own write
up the balance sheet so I own a lot of
preface converts senior debt floating
rate notes I love that stuff because
when they get upgraded I get capital
appreciation meanwhile I get a check the
key to life is the check coming in it’s
the cash if you always always always
look at the free cash flow this will
keep you safe because the only friend
you’re going to have when you’re old and
crusty is not your dog not your kids
it’s the cash in the bank that’s still
going to love you in your book you also
say when you’re investing you should
have an element of fear in there you
should make the assumption when you make
an investment there’s some probability
you’ll lose it it will go to zero and
that’s why you need to have you know a
reserve like a back-up plan
some cash set aside that if everything
blows up you’re okay I find it
extraordinary when people make their
first you know liquidity event and they
have some capital that they blow it all
again that is the biggest mistake you’ve
got to take a nut even if it stays in
cash or it’s a very very liquid safe
securities to say that I don’t touch it
goes back to what my mother taught me
spend the interest never the principle I
mean look you know I make a lot of crazy
investments I don’t touch the principal
I’ve learned something a long time ago
for my mother you’re going to find this
fascinating when I was a seven-year-old
boy and she was working at that time she
used to take me with a bank to her every
Thursday that’s when they paid the girls
where she worked and she take 1/3 of her
paycheck and put it into bonds and
dividend-paying stocks she used to say
to my brother and I then boys never
spend the principal only the interest I
had no idea what she was talking about
but she was drilling that into my head
for a reason I think became very
important decades later after she passed
away I became the executive for her
state and I for the first time I saw a
secret account she kept from both of her
husband’s her whole life made up of
dividend-paying large cap stocks and
corporate credit do you have any idea of
the performance of that portfolio
she blew away every indicee I was amazed
that she was a portfolio manager she was
just a concerned mother that needed to
have capital no matter what happened I
started to do some research you may find
this fascinating over the last 40 years
over 70% of the market’s returns have
come from dividends not capital
appreciation
she must have intuitively felt that and
knew that that forever changed my
investment philosophy I’m a dividend guy
I only buy stocks that pay dividends
I’ll never buy a stock that doesn’t
return capital because the data tells
you not to unless you’re a masterful
stock picker and you know exactly when
to buy and sell you can’t my view beat
those odds 40 years 71 percent returns
that’s it for me dividends only I like
gold because in a way it’s a stabilizer
it’s an insurance policy you know I
listen to all the gold pundits and
they’re always wrong as far as I’m
concerned it’s possible to time the
moves I’ve owned gold for decades and I
simply have a 5% waiting I look at it
quarterly when it becomes more than 5% I
sell into the strength and when it
weakens I buy into the weakness it’s
just a stabilizer you know I’m not one
of those guys
going to go to 40% winning in gold I
don’t believe the hyperinflation story
it hasn’t happened gold is popular for a
whole host of reasons and 5% seems to be
enough it’s worked for me in portfolio
management it’s the only security I own
that doesn’t pay a deal
so Kevin I guess do you not care if gold
goes to two thousand or five thousand
dollars an ounce you’re still going to
buy gold yeah I don’t care like let it
let it run I’ll be selling into that
strength keeping a 5% weighting you know
what I’ve learned I’m an old crusty
investor when everybody’s saying you’ve
got to own it you should be selling it
because when it corrects it doesn’t
touch the sides on the way down so I
simply say 5% is good for me some people
like it 10 15 % waiting I’m a 5% guy and
I’m disciplined about it I hope it runs
to 5,000 I don’t care I’ll be selling
selling selling selling and selling all
the way up keeping it 5% and when it
corrects back down in 2000 leave buying
it in it’s fun that’s the way you should
work with gold never get so caught up
that you take all your dividend yielding
securities that are also a hedge against
inflation and put it into a commodity
like gold what’s the value of a stock
that never returns capital to its
shareholders I don’t know because the
only way you can make money is if
somebody else is willing to buy that
position at a higher price for some
emotional reason perhaps or for some you
know foresight that maybe the company
will return capital one day and I think
of it you know what when you learn as an
investor over multiple decades is the
only thing that matters is free cash
flow that’s it there is no other reason
to own a stock and with that philosophy
it brings you into a place where you
focus on the company’s ability to
generate incremental cash flow because
just owning a dividend paying stock is
not good enough because you know let’s
say we find a stock today that’s paying
a three percent dividend yield and
tomorrow because it’s forecast for sales
get cut in half the stock drops are 50
percent now it’s yielding six percent I
don’t want to own that stock either so
my tests in this index that you know
created with what see Russell looks at
the balance sheet every year we test to
make sure that the
company is viable in its ability to
generate cash this is extremely
conservative investing this is for the
long haul these tools are not for as
you’re suggesting for spicy you know the
hot stock does your I’ve done that I’ve
been there you know let the young legs
do I have zero interest in that I don’t
care what the hot new stock is you know
when a company comes public I won’t own
it either it’s got to prove to me over
multiple years that it can continue to
generate cash before it even fits in to
what I’m doing so I’m really boring and
I like it that way so a great company
doesn’t necessarily have to equal a
great stock they can be two very
different things from your perspective
there’s many companies where I buy their
products and services I would never
touch their stock so you know it’s sort
of we’re talking about real money here
the stuff that you need to preserve you
know when I think about my family trusts
I can’t afford to mess around with that
what investments are you making today
I’m liking very simple deals where I can
understand the business model give you
an example how boring and simple and how
successful we be this is from shark tank
you know I do I look at a lot of deals
on shark tank and on Dragons Den because
I use I invest five percent of my net
worth every year in venture deals so I
used to have to go find them now they
come to me I’ve got two platforms to
work on this is a shark tank deal so
Oprah has a hairdresser interesting guy
he’s uh his hobby was tee this team you
drink and he became what’s called a nose
he had a certain skill to be able to
smell salon teez blend them one day he
gives couple years ago a cup of tea to
oprah well he’s doing her hair and she
sips it and says as best you ever had
she goes on the show half an hour later
and says this tea called Talbott teas is
the best tea I’ve ever had he gets
orders the next day for five hundred
thousand dollars you know the Oprah
effect you’ve heard of it right he can’t
finance that so he comes on Shark Tank
and he’s looking for $250,000 and I
agreed to buy 35% of the company
I love tea it’s so simple gets on Oprah
500,000 orders Neiman Marcus all kinds
of individuals bordering on the internet
simple tea orders cash flow right while
we’re in the middle of doing the deal
the show airs and Jemma juice a public
company says we want to be in the tea
business we love this story we love the
brand I want to buy the company
I haven’t even written a check yet and
bang the deals done Wow yes Wow that’s
the kind of deal I like because it was
simple it’s not a complicated text story
its tea tea with a brand now you go into
a Jamba Juice anywhere in North America
that’s my tell the tea’s that’s right
isn’t that wonderful is wonderful that’s
all you are well that’s why I am it is
but you know I look at it this way the
simple deals are the ones you make money
on so I take that cash back Irie deploy
it so I like simple stories with revenue
attached to them
you know the high-tech stuff I came out
of that market it’s so complicated so
much can go wrong so I just love deals
where they see an easy path to revenue
so thank you guys so much for watching
I’d love to know what did you learn from
this video what clip spoke to you the
most and what are you going to take from
these clips and immediately apply to
your life or to your business somehow
leave it down in the comments below I’m
super curious to find out finally you
want to give a quick shout-out to the
lonely bookaneer thank you so much for
breaking up a copy of my book your one
word and for making that awesome youtube
video on it as well I really really
really appreciate your support and I
hope you enjoyed the read I definitely
think that this book is about finding
the core thing you want for your work
your life and your business so thank you
guys so much for watching I believe in
you I hope you continue to believe in
yourself and whatever your one word is
much love
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