How To Grow A $1 Million Portfolio

Joseph Carlson (Founder) 00:00.184

should be buying quality companies when they present an opportunity with an attractive valuation based on historical levels and future estimates and this is very easy to determine

Joseph Carlson (Founder) 00:09.584

if we look at a stock like mastercard we can look at the valuation based over its long term history for example if i look at the PE ratio over let's say ten years i can see that there's time periods where it's gone really high a trailing PE of sixty there's

Joseph Carlson (Founder) 00:23.944

other time periods where it's been at a fifty and these are not the times to buy this stock this was during the peak of the market so we want to avoid buying mastercard at these points but then we also have kind of the average peaks we have right here that's around a forty

Joseph Carlson (Founder) 00:38.064

trailing PE ratio

Joseph Carlson (Founder) 00:39.624

and then we had where mastercard was just a week or two ago just a couple weeks ago it traded down to the low end of its historical PE ratio now

Joseph Carlson (Founder) 00:48.864

what happened in this time period well i made multiple videos in a short amount of time saying i'm buying mastercard and i did buy a lot of the company right at that specific point i bought thirty thousand dollars of mastercard then another twenty then another fifteen and

Joseph Carlson (Founder) 01:04.344

another twelve and i bought all of this within a four day period

Joseph Carlson (Founder) 01:08.424

most of my buys were around the range of five hundred and thirty six five hundred and thirty six dollars is right there during that dip so i did my buys right during these dips right here and what did the stock do after these buys it predictably went upwards now

Joseph Carlson (Founder) 01:23.784

the passive observer may look at this and say that it was mere luck that i bought it during that time period but it was actually a very deliberate process looking at the five year historical trading of the company and buying it specifically during one of its lowest valuations

Joseph Carlson (Founder) 01:36.664

what good investing looks like is buying quality companies not long shots and buying them when they present opportunities with an attractive valuation based on their historical and future estimates

Joseph Carlson (Founder) 01:47.384

this doesn't guarantee success in every situation there's no guarantees in investing and even if you do as much due diligence as possible you may still have a bad outcome but if you have a great process if you're doing the work and you have fundamentally strong companies that

Joseph Carlson (Founder) 02:02.624

you're buying at great valuations overall you're going to make a lot of

Joseph Carlson (Founder) 02:06.744

money you'll have far more winners than you have losers and that is exactly what i've seen in my portfolio

Joseph Carlson (Founder) 02:12.184

now we also have to look at when to sell a company and this is where i believe a lot of investors also get things wrong the best returns come from holding genuine compounding machines for long periods of time and not reacting to short-term valuations and catalysts

Joseph Carlson (Founder) 02:25.584

meaning that if investors buy into a great company they've made some money on it but they sell it just because of some short term concern or because of valuation trended up a little bit they're likely going to miss out on the broader picture of the story

Joseph Carlson (Founder) 02:38.224

we want to look at these companies as long term stories long term arcs over decades of time the investors that push their portfolios to a million dollars let these companies do the compounding for them they let the companies do the heavy lifting and they try not to get in the

Joseph Carlson (Founder) 02:53.224

way

Joseph Carlson (Founder) 02:54.064

then finally another thing that i think is important is to avoid the trap of constantly lowering the quality of your portfolio and seeking lower valuation do not trade quality for valuation it's a losing recipe in the long term in

Joseph Carlson (Founder) 03:07.824

summary if we want to get to a million dollars we have to have an active income build up your investments as aggressively as possible budget intelligently you are the capital allocator of your household budget you are the one that needs to decide what goes into investments and

Joseph Carlson (Founder) 03:22.504

you should try to make it a habit

Joseph Carlson (Founder) 03:24.464

next we want to look for companies that are not long shots instead they're toll booths highly predictable compounding machines deeply embedded ones that you can sleep well putting more and more money into as they make you rich and we

Joseph Carlson (Founder) 03:36.184

don't want to sell these companies when whenever a lower valued stock or a new stock comes into the picture there is going to be some level of trading that goes on in every portfolio but we should try to minimize that and make sure we're making good decisions with ourselves

Joseph Carlson (Founder) 03:50.104

building up a portfolio to a million dollars is not easy it takes a ton of work a lot of active income a lot of consistency and discipline but it is something that every single one of us can accomplish something everybody can do

Joseph Carlson (Founder) 04:02.904

and don't be discouraged if you're not close to there the way the compounding works is as you get snowball rolling it gets easier and easier if you have a dedicated approach if you stick to some basic philosophies that are well thought out you will get to a million dollars

Joseph Carlson (Founder) 04:17.784

sooner than you believe now

Joseph Carlson (Founder) 04:19.024

moving on we have news that waymo caused a big stir in california or at least san francisco just a day ago there was a massive blackout this was caused by a california power outage apparently this also stopped all the street lights which also affected waymo

Joseph Carlson (Founder) 04:34.424

you can see the waymos just like lined up at the intersection not moved there's people in there that they don't know what to do so and you saw this all over california it was actually a huge mess

Joseph Carlson (Founder) 04:45.424

now waymo addressed this they said yesterday's power outage was widespread event that caused gridlock across san francisco with non functioning traffic signals and transit disruptions

Joseph Carlson (Founder) 04:55.424

they said while the failure of the utility infrastructure was significant we are committed to ensuring our technology adjusts to traffic flow during such events now