- Private investor Jonathan Neuscheler, 25, told Insider how he chooses stocks.
- He tries to look for “what’s ‘in’,” he explained.
- He prefers to invest directly in companies rather than in ETFs.
While most tend not to think about working at the age of 13, Jonathan Neuscheler already had his first job. In his hometown in Baden-Württemberg, Germany, he delivered advertising leaflets almost every week until he turned 18.
The work was exhausting, he told Insider. But he learned one thing from it that still drives him today.
“I started to appreciate how important it is to build a certain independence and sovereignty over your own finances,” Neuscheler said.
The 25-year-old started learning about the stock market at an early age. He invested in stocks for the first time at the age of 17. His first shares were in Porsche. He thought it was a “cool company” and it also came from his home country.
After school, he studied business administration at a dual university in Stuttgart and worked at a state bank. He completed an MBA and co-founded an analytics startup, which he left in mid-2020. About a year later, he founded “Abilitato,” a blog on which he analyzes stocks, among other things. This is how the enthusiastic private investor managed to turn his hobby of “finding and analyzing stocks” into a full-time job.
Stocks are more than just numbers that jump up or down
A stock isn’t a speculative thing, but a piece of “entrepreneurial partnership,” said Neuscheler.
It’s important to be aware of this when analyzing your portfolio. If you know that you have a tangible asset in your portfolio and not just a “number that jumps up or down,” you’ll get through a crisis just fine.
“If you look too much at the price, then that’s often the reason for wrong decisions,” he said.
You get nervous when things go down. And then you start asking yourself whether you’ve made a mistake. Even if you make a profit, you shouldn’t sell immediately. His tip is to stay calm.
Neuscheler explained how he was able to learn from an occasion when nerves once got the better of him. It was in 2014 when he bought a few Amazon shares at a price of around $230 to $280 (€200 to €250) and sold them again at $340 (€300). At the time, he was proud of the profit.
“I had a good life and a nice summer. For me, that was a lot of money,” he said.
Today, the stock stands at over $3,400 (€3,000).
“Looking back, selling was a stupid decision.”
That’s why now he only focuses on long-term investing.
His portfolio is a “colorful bouquet”, he said
“In my search for new stocks, I try to look at what other people are buying, what’s ‘in,'” said the 25-year-old.
He always asks himself certain questions when making an investment decision — What has a great future? What’s on the rise? What’s initially catching on among a small group, but at the same time has the potential to one day enter the mainstream?
His portfolio currently contains around 50 stocks, a “colorful bouquet,” as he described it.
This also becomes clear when you look at the companies he invests in.
These include big names like Alphabet, Coca-Cola, and Microsoft, but there are also companies that probably aren’t familiar to most, like Bénéteau and DEFAMA.
Bénéteau is a French sail and motorboat shipyard and was founded in 1884. The company is one of the largest manufacturers of sailing yachts in the world. Within the last 12 months, the share price has increased by 55%.
DEFAMA is a German real estate company that buys properties and leases them to retailers. Its largest customers include Kaufland, Lidl, Toom, Edeka, and Netto. Within the past year, the share price has risen by around 42%, and 160% over the past five years.
Stocks that investors talk about the most are also the “most dangerous”
As an investor, you’re always on a kind of “treasure hunt,” Neuscheler said.
“You have to turn over as many rocks as you can, that is, look at companies, hoping that somewhere underneath you’ll find a little piece of gold,” he added.
He also emphasized the importance of diversification.
“By this, I mean that I never make myself dependent on the performance of a single company,” he explained.
Neuscheler said he often feels that stocks that investors talk about the most are also the most “dangerous.”
Everyone has them “on their radar,” he said.
“This enormous attention can cause the price to go too high because there’s too much demand,” added the 25-year-old.
That’s where he tends to be cautious. But there are always exceptions, he went on. After all, he also has shares in Alphabet and Microsoft in his portfolio, for example.
He doesn’t want to invest in crypto out of “pure greed” for a quick profit
He doesn’t have ETFs or cryptocurrencies in his portfolio, however.
“I don’t want to invest in ETFs, because I want to be directly involved in the economy,” Neuscheler said.
If he sees particularly “good opportunities,” he wants to be able to exploit the potential directly and not have to invest in “thousands of companies” from an index at the same time. That’s because an ETF is a block of shares, so to speak, in which you invest your money in a large number of companies at the same time.
In addition, Neuscheler doesn’t own any cryptos.
“I’m too smart to buy cryptos out of pure greed for a quick gain,” he said.
But he said he’s also “too stupid” to understand all the potential uses of the various coins and which ones will work out or not.
“So I stay away,” Neuscheler went on.
Because simply buying and hoping isn’t what he wants to do.
“As a private investor, you don’t have to dance at every party,” he advised.
