The Counterintuitive Truth About Stock Prices Every Investor Gets Wrong

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The Counterintuitive Truth About Stock Prices Every Investor Gets Wrong

Beavis Wealth 03.03.2026 6 031 просмотров 241 лайков

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Stop panicking when the market drops! Learn why "red days" are actually the best thing for long-term investors. In this video, I break down a concept inspired by ScottsInvesting on the Blossom Social app: why buying a stock and then wishing for the price to drop is actually the most logical move you can make. If you are in the "accumulation phase" of your life, a bull market is actually your enemy. What you’ll learn: *The Inventory Mindset:* Why you should treat your portfolio like a business buying stock, not just a flashing dollar sign. *Net Buyers vs. Net Sellers:* Why your age and career stage completely change how you should view market volatility. *Sequence of Returns Risk:* Why a red market is a "gift" to a 30-year-old but a "threat" to a 70-year-old. *The 3-Step Checklist:* How to tell the difference between a "discount" and a "value trap" by looking at business momentum, balance sheets, and competitive advantages. Whether you're a beginner or a seasoned pro, shifting your unit of measurement from "account balance" to "share count" will change the way you invest forever. Join me on Blossom Social: https://www.blossomsocial.com/ See my real-time portfolio and trades: Username: MarcB #Investing #StockMarket #FinancialLiteracy #PassiveIncome #BlossomSocial #MarketCorrection 🤗 Join over 500,000+ DIY Investors on the Blossom app (FREE) ➤ https://getblossom.onelink.me/SOfu/brandonbeavis 📑 Chapter List 0:00 The Counterintuitive Truth About Stock Prices 0:51 Shift Your Mindset: Dollars vs. Inventory 1:29 Why People Run Away From Sales 1:57 Scenario A vs. Scenario B: The Power of Lower Prices 2:39 Are You a Net Buyer? 3:33 Why Bull Markets Are the "Enemy" of the Young 4:13 When Red Markets Become a Threat (Retirees) 5:33 Changing Your Unit of Measurement: Share Count 6:24 Checklist: Is it a Discount or a Disaster? 6:45 1. Business Momentum 7:20 2. The Balance Sheet Test 7:51 3. Competitive Position & "Moat" 8:41 Returns are Determined at Purchase 9:47 Join me on Blossom Social ----------- 📥 Subscribe to the Pulse Newsletter for Weekly Market News ➤ https://thepulse.beaviswealth.com/ Courses & Training - The Investing Academy ➤ https://bit.ly/theinvestingacademy Follow Us On Blossom ➤ https://getblossom.page.link/brandon Instagram ➤ https://bit.ly/3Oechgh LinkedIn ➤https://bit.ly/3RLndF7 Website ➤ https://www.beaviswealth.com ----------- The above affiliate links are provided for your convenience, and if you click on a link and end up purchasing a product or service, this channel may receive compensation for the referral. We have personally vetted each of these companies and services and, in our opinion, we believe they provide value to our viewers, depending upon your individual circumstances. Business Inquiries: support@theinvestingacademy.ca ----------- Beavis Wealth Disclaimer: The views and opinions shared on this channel are for informational and educational purposes only. Although previously licensed, the contributors are no longer industry participants and are not licensed to provide financial advice. They strive to provide you with educational information in an entertaining manner. Always do your own research and due diligence before investing. Generally speaking, you should consult a licensed investment professional before investing.

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The Counterintuitive Truth About Stock Prices

If you own stocks, shouldn't you want the price of that stock to go up? That kind of feels like common sense. Prices go up, you make money, prices go down, you lose money. What is there to discuss? I'm here to say that's not always the case. And I do want to give a shout out to ScotsInvesting on the Blossom Social app for inspiring this video. He recently made a post where he bought some shares of a speculative company and then he said something that sounds completely backwards. I'm going to quote him here. He said, "Selfishly, I'm hoping for share prices much lower than where it's trading today. " So, why would someone who just bought shares of that company want them to drop? To a lot of people, that just sounds odd. But in certain circumstances, it is the most logical thing that you can imagine. Today, I'm going to look at why red markets are actually a gift to some people, but actually, yeah, they are a threat to others. So, I want to go back

Shift Your Mindset: Dollars vs. Inventory

to Scott here. To understand his logic, you have to make a mental shift in how you look at your investments. Most people look at their investment account as a dollar amount. That makes sense. That's kind of when you look at it. You see the dollar amount there. You need to start looking at it as an inventory. And I want you to think of this analogy here. If you are building a business and you need, let's say, a,000 laptops, do you want to buy them today at 2,000 bucks each or would you rather buy them at $1,000? Now, obviously you want them as cheap as you can get them. In this scenario, you are a net buyer. You are in the accumulation phase. You're gathering stuff. You're building that inventory. The stock market, this is

Why People Run Away From Sales

strange. It is one of the only places, in fact, probably the only place where people run away from a sale, right? I know if my grocery store cuts bacon by half price, I'm going to rush in and buy it. But a great company falls 50%. People panic and they rush out. Now, Scott probably, I'm guessing, is not looking for a quick 5% gain. The way he invests, he's probably looking for a 10x 20x return over a period of time, maybe, let's say, a decade. Now, two scenarios.

Scenario A vs. Scenario B: The Power of Lower Prices

Scenario A, the stock stays at 50 bucks. He buys a 100 shares, that's $5,000. Scenario B, in the next mile, it drops to 25 bucks. And he buys 200 shares with that same $5,000. The company eventually hits $100 a share. Now, in scenario B, I mean, he hasn't just, you know, edged out. He's actually doubled the outcome from where he would have bought at the initial price. If you're a new investor and you see a 30% 40% drop in a blue chip name, that seems like it probably is a warning sign, probably uh scare you a little bit, but there is a potential gift here. In a lot of cases, the business fundamentals haven't changed. They are still intact. If you're 25, 35

Are You a Net Buyer?

let's say 45 years old, you're still working. You're probably still a net buyer. Every month, you're going to take a portion of your paycheck, your cash flow. You're going to swap those for shares of a new business units if you're buying exchange traded funds. Now, got to be honest here. In a perfect world, we would love if every single stock that we bought just went straight up the moment that we hit the buy button. We're human. We like seeing that green. I'm always uh amused by when we have a nice strong green day, everybody's happy. When we see a red day, most people aren't happy. But the reality is that is not how the markets work. Frankly, it's not actually how wealth is built. Once you accept the reality that the market is going to take uh gaps, it's going to take breaths from time to time. It'll go up and down. But this concept should start to take more sense when you realize that the markets are not going to always just go in one direction. If

Why Bull Markets Are the "Enemy" of the Young

you are still in your earning years now, a bull market with skyrocketing prices is actually your enemy. The higher price that means that your monthly contributions are buying fewer and fewer shares each time. If you're a net buyer, if you are in that accumulation phase, you want to get as many of those shares as possible. You want the market to stay flat, drop even for the next 15 years or so while you are still in that accumulating stage of building up your inventory. You want those stocks to stay on sale right up in perfect world before the day that you retire and then go higher when you actually need to sell them. That's not how things work, but that's what you would like in a perfect world. Now, I do want to flip it a

When Red Markets Become a Threat (Retirees)

little bit here and look at when a red market, when a down market becomes a threat. You're 70 years old. You're living off your portfolio. You are now in a net seller. You're relying on the shares that you've accumulated over those years to provide you with income. Now you might not have 10 years to wait for a recovery. If we see a big drop, you need income today, right? And that is where falling markets will become dangerous. This is what we call sequence of returns risk. If you are forced to sell shares when they're down 30%, 40%, 50%. Once you've sold those, those shares are gone forever, right? You're not participating in the eventual rebound. And so for retirees, if we see a prolonged downturn, that can permanently damage the longevity of your portfolio. And that is why asset allocation typically shifts as you age. The goal shifts from maximizing the upside to ensuring that you never have to liquidate those equities that you've accumulated at bad prices, at depressed prices, just to cover your living expenses. So whether red, whether down markets is a gift or whether it is a threat, that relies pretty much entirely on your cash flow direction in or out. So I want to look at how we shape our minds to deal with here. Thinking back

Changing Your Unit of Measurement: Share Count

to Scott and what he said earlier, the secret to staying calm during a correction, as I suggested, is changing your unit of measurement. Right? beginners, amateurs, a lot of people, they measure wealth by the balance of their account. But the pros really measure it by share count. How many shares you've accumulated. If you own a,000 shares of a company and the price falls from 100 bucks to 70 bucks. You still own those thousand shares, right? You still own the same slice of future earnings, other benefits that the company will bring. Scott, in his case, he's hoping for lower prices because he hasn't reached his target inventory yet. He's taken an opening position, but he understands that investing say 10 grand at $70 today, that will buy more future power than if you invest 10,000 at 100 bucks. So, let's look at a quick

Checklist: Is it a Discount or a Disaster?

checklist here to see whether a market dropping is a discount for you or maybe a disaster for someone who is uh truly retired and relying on that income. When you're trying to assess a real opportunity and differentiate that from a value trap, there's three sort of broader questions that you can ask yourself to help you analyze or to help you assess rather what that is. First of

1. Business Momentum

all, is the business momentum. Is the company's underlying business still moving in the right direction, still moving forward? You have to look past that share price. Things like, are customers still sticking around? Is the demand stable? Is management still executing? Right? Sometimes the markets they will push prices down even when the operations that are underlying that business are still solid. That's often about shifting sentiment or valuation expectations but not necessarily a broken company. However, if the decline in price does mirror weakening operations, then that is an entirely different story. Now the second thing

2. The Balance Sheet Test

just look at the balance sheet. Give it a quick review here. Can the company withstand pressure? When we get to these tougher environments, financial strength really matters. When you have businesses with flexibility, they can adapt, they can invest, they can survive these downturns. Businesses that are stretched too thin though, they often lose those options very quickly. And if a company needs to go to external funding just to stay afloat, then these falling prices can actually make survival iffy. You can make it very hard. And if that's what you're seeing in a company, that's vulnerability. The third thing is the

3. Competitive Position & "Moat"

competitive position test. Why is the stock actually falling? Is it a broad fear in the markets in general? Is it economic uncertainty? Is there a rotation out of a specific sector? Or has something fundamentally changed in the industry that the company's operating in? If the business still has a durable advantage, a brand network effects, switching costs, intellectual property, all those things, then short-term price declines might just simply be a uh a temporary period of pessimism. But, and you got to be honest when you're assessing these companies. If the advantage is fading, if competitors are taking more share, if the product is becoming less relevant, then the lower price that you're seeing may just be justified, right? When the price falls, the key question isn't, is it cheaper? The real question is, is it still strong? So, why does Scott hope

Returns are Determined at Purchase

that his stock actually drops? That's because he understands one of the most critical investing principles and that in a large part returns are actually determined at the point of purchase not sale. If you can secure quality assets at reasonable prices that will build a foundation for long-term growth. Now if you are in the accumulation phase here then red doesn't mean that you have to panic. It can mean opportunity. We may be seeing that now again provided that the fundamentals remain intact. Now if you are in retirement then the down markets they do require risk management and planning before the markets arrive here. Remember the market doesn't care about you. It doesn't care about your emotions. the what you're going through right now. It just reflects that you know sort of fundamental supply demand and expectations and your job is to know where you stand and what is appropriate for you. So are you accumulating inventory? Are you just distributing it now? Because in the long run, the investor who understands their own timeline buys and sells accordingly even when the markets are down. They're often the ones that come out ahead. I hope you found some value in this video.

Join me on Blossom Social

Uh thanks again to ScotsInvesting on the Blossom Social app. If you're not already on the app, I'll put a link here. You can actually go and check and see what I hold in my portfolio right now. My username is Mark B M A RC CB. It's free to join. Go have a look. As always, I say thank you for watching.

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