Steve Eisman’s Top Tips

Do you have any tips for investors that
are just starting out?
If they find something where it seems like it’s too good to be true it’s probably too good
to be true, so be very careful. And the second thing
is if you’re just starting out start
with an amount of money – a small amount
of money – so that if you lose a lot of it
you don’t lose sleep and start that way
and start to educate yourself.
How important is it do you think to diversify a portfolio?
It’s incredibly important, well so let me
explain. Putting all your eggs in one
basket to me is not really investing
it’s gambling because it could work for
a while and you feel like a genius, but
nothing lasts forever. And then things
change and all of a sudden you’re losing
all this money in your one investment. It’s not worth the risk there’s a real
concept of just risk / reward. This is not
the game we’re not playing Monopoly, this
is your money, this is your retirement. So
obviously if you put all your chips in
one basket and it does really really
well you’re going to make a lot of money.
The odds of a bad thing happening in
that case can be high and the
ramifications of it or can be
catastrophic and so anyone who invests
the risk of putting all your eggs in one
basket is just too enormous to do it.

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