There is one investing mistake that celebrity investor Kevin O’Leary will never make again.
In a recent interview on CNBC’s “Squawk Box Asia,” he said, “When I was a young goat trader, I used margin and got slaughtered. And I never did it again.”
Margin investing involves borrowing money from a broker to buy stocks or other assets. This provides higher returns when the stock price rises, but also increases the risk when the stock falls.
“I believe that every generation, including me, is taught a lesson with a margin,” said the venture capitalist, who is also the co-host of “Shark Tank” and its chairman. O’Shares ETF,
“You can tell every young investor that he has never seen a bear market…
“I think it is very important that young traders learn this and they are learning it now.”
a bear market Occurs when the overall stock market falls 20% or more in value from its recent high. right now Last weekThe S&P 500 fell more than 21% from the close of its all-time record set in January.
O’Leary said margin trading is “a very, very, very complicated concept for investors.”
“They don’t understand this until they zero in on margin calls and it is happening in every sector, especially crypto right now,” he said.
“The big men are crying over the crypto place.”
last Monday, crypto market cap Falls below $1 trillion, down from $3 trillion at its peak in November 2021 as trading platform stopped withdrawal, companies cut jobs And panicked investors gave up their stakes.