Stock Picking Trap

Talking Real Money - Investing Talk

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9d ago 28:47

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In this episode of Talking Real Money, Don and Tom take aim at one of the most persistent investing mistakes: owning individual stocks. With humor and sharp skepticism, they explore why investors—even those who say they follow the show’s advice—still concentrate wealth in a few companies like Apple, NVIDIA, or their employer’s stock. Referencing Jason Zweig’s Wall Street Journal column and legendary research from Bessembinder, they show how dangerous, emotional, and often delusional this strategy really is. From Washington Mutual to VF Corp, the history of single-stock implosions is long and painful. Plus, they field smart listener questions on business loans, Roth conversions, and hummingbird beak evolution. Yes, really.

0:04 Why owning individual stocks is more like gambling than investing

0:58 Zweig’s column and stories of extreme stock concentration

1:42 Real investors with 30%+ in just a few stocks

3:00 “I only own Apple”—the emotional traps of stock picking

5:02 Washington Mutual: faith in the familiar turns to loss

6:44 The VF Corp disaster and foundations behaving badly

8:43 No one rings a bell before your stock collapses

9:49 Stock picking risks: underperformance and default

10:22 Don’s infamous four-stock “diversified” portfolio (spoiler: zeroed out)

11:48 Emotional attachment to companies vs. logic

12:27 Top justifications for owning individual stocks—and why they’re bogus

13:40 “It’s money I can afford to lose” (No, it’s not.)

14:51 Owning your own business ≠ owning a stock

15:20 Risk in entrepreneurship is different—but still real

16:18 Listener question: Pay cash or borrow to buy a high-return business asset?

18:02 Don and Tom strongly favor using business cash over loans

19:11 Why even 40% returns are no guarantee

20:39 Hummingbirds evolve to match human feeders (seriously!)

21:34 Listener Q: Convert old 401(k) from Mutual of America to Roth IRA?

23:20 Why you should probably roll that 401(k) out—fast

23:33 Joke time: The silent P in pterodactyl

24:32 Don’s mental age… remains in the single digits

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