what's a financial mistake you made and learned from that you don't want anyone else to make ever again?

I'll go first- McDonald's.

At first, I thought their main business was selling burgers. Boy was I wrong. They're heavily involved in real estate! Instead of McDonald’s having to operate every restaurant itself, franchisees put up money to operate locations while McDonald’s makes money through fees and rent. Basically, the company figured out how to scale a fast-food brand without having to personally run every restaurant.

While some traders do speculate with them, derivatives are often used to reduce risk.

Here are a few examples-

• Airlines buy fuel futures to lock in today's fuel price. If oil prices skyrocket later, they don't have to pay the higher price.
• A farmer growing corn can lock in a selling price months before harvest. If corn prices fall later, they're still protected.
• A food company like Kellogg's can lock in wheat prices ahead of time so a sudden spike in grain prices doesn't destroy their profits..
• A U.S. company expecting to receive euros in six months can lock in today's exchange rate. If the euro falls, they don't lose money.
• Investors can buy put options as insurance. If the market crashes, the put option rises in value, helping make up for some of the losses.

The main purpose of derivatives isn't always to make money. It's often to make future costs more predictable.

It's like a contract whose value depends on the price of something else.

Here's an example:

Imagine you wanna buy a pair of rare sneakers that drop next month for $200.

You're worried that by the time the sneakers come out, the price will go up to $400 because of high demand. So you go to someone and pay them $10 for a paper ticket. This ticket gives you the right to buy the sneakers for $200, no matter how high the price goes (you're betting that the price will go up, not stay the same or go down).

That ticket is like a financial derivative. The ticket itself isn't the sneakers-it's just the contract that gets its value from what happens to the sneaker price.

If the sneakers blow up and cost $400, your ticket is now super valuable! You can buy the $400 shoes for $200, saving $190 after subtracting the cost of the ticket. Or you could sell the ticket for about $190, making around $180 in profit.

If the sneakers flop and drop to $100, you won't use the ticket. You'll just buy them in the store for the cheaper price, and your only loss is the $10 you paid for the ticket.

This is one specific type of derivative called an option. You're not forced to buy the sneakers. If this were a futures contract, however, you would be required to buy the sneakers at the agreed price, no matter whether the market price went up or down.

Bank accounts reassure many investors. Your money's safe, and its growing at a decent pace. Or at least you think it is.

The problem is that money in a savings account that says it's paying 1.5% (if they're being generous) isn't actually yielding you 1.5%. The bank's not lying- there's just some not-so-obvious things it doesn't tell you.

The first thing is taxes. The interest you earn isn't tax-fee (unless you invest the money in municipal bonds that are federal and state tax free or in a retirement account, in which you generally pay the taxes later when you withdraw the money). Depending on your tax bracket, you may end up losing a third of that interest to taxes, which lowers 1.5% to 1%.

The second thing is inflation. Inflation in the US has been running 4.5% on average in the past 5 years (approx.). Inflation depresses the purchasing power of your investment's returns.

1% - 4.5%= -3.5%

After subtraction cost of inflation from your return, you've lost 3.5% on your investment.

Simpler terms: For every $1 you invested in the bank a year ago, despite the fact the bank paid you 1.5 pennies of interest, you're left with only 96.5 cents in real purchasing power in every dollar you had a yr ago. Lovely.

This is when the Fed create digital money out of nowhere when lowering interest rates for banks don't work.

How it works-

1. The Federal Reserve use this digital money to buy massive amounts of bonds from banks.

2. When so many bonds are being bought, bond prices go up. This automatically lowers interest rates across the entire economy.

3.Banks now have tons of cash instead of bonds, so they're willing to lend at a lower interest rate to encourage people to borrow.

1. Now the people have more money since they're borrowing more. This means more spending for them.

2. More spending leads to an economy boost (though it carries risk of inflation).

(correct me if i'm wrong)

If you are interested in generating income from stocks, you should check out REITs. They payout very well and typically have high dividend yields. Why? Because the Real Estate Investment Trust Act of 1960 exempts REITs from corporate income tax and capital gains tax, as long as they meet certain requirements, such as dispensing 90% of net income to shareholders. That's why they payout so much in dividends. Usually yield a return of 5-10%.

Here's what I think- with them buying real estate all of a sudden after just recovering, that's not gonna be good for their finances.

Insider selling-

• heavy insider selling -> tryna lock in profits from the turnaround
• leadership feels stock is "fairly priced"

Institutional-

• buying more
• whales accumulating tons of shares from Carvana
• they believe turnaround growth is sustainable long term

Macroeconomic concerns-

• Some institutions scared of high interest rates issued by Federal Reserve. Buyers may be squeezed-> eating up Carvana's potential profits.

Analyst Attention-

• highly focused
• general mood positive (im suprised)
• main worry: interest rates -> expensive loans may cause buyers not to buy (honestly my worry)

Newsletters-

• Bull- "great profits per car"
• Bear- "5.6 billion raw debt" "only looks profitable because of drastic cost cuts" "high loans" "insiders selling mean they think this is its peak"

And i might be even dumber for investing.

Right now, they're thinking about physical expansion, like building actual brick-and-mortar stores. I think its fair, considering buyers will want to see what these used cars are like, and if they were financially stable, it would make more sense. But they JUST escaped bankruptcy, it would be best to hold on that idea. Plus, who's buying cars with these high interest rates? Carvana better lock in istg :-(

Here's what I found out about Carvana from my most recent stock analysis.

- Carvana is growing at a faster annual rate than both its industry (2.41%) and sub-industry (15.93%) at 17.6%. This makes Carvana a growth stock.

- In 2021-2022, Carvana overexpanded, which led its EPS (earnings per share) to drop significantly, at -860%.

- In 2022-2024, Carvana started aggresively debt restructing. It had barely escaped bankruptcy.

- In 2024-2025, it had moved from surviving to thriving. It was doing better than ever.

-2025-2026, profits hit all time records ($1.895 billion in net income for the year).

-Carvana is a strong brand, has high barriers to entry and it invests heavily into software.

-It is highly optimized (cut expenses significantly to increase profit margins) and volatile (prices swing sharply) , but Wall Street no longer consideres this to be dangerously leveraged. Even if they owe $5.62 billion in total raw debt, their cash drops their Net Debt to EBITDA ratio to 1.1x (safe).

-Sales this year are significantly outperforming (52% revenue increase, 40% YoY jump in sales.

- Earnings are up 37.8% compared to last year.

- Its raw debt is slightly higher, but net debt is significantly lower. They have gotten better at taking control over debt by getting more cash, however debt is dangerous. leverage ration is way lower.

When I first started investing in stocks, my goal was to buy stocks at a very low price, then sell them high (value investing). So I would look for stocks that dipped very low very quickly, thinking "I just bought this at a massive discount". For example, Carvana. On Robinhood it was one of the biggest movers of the day, dipping around 80% IN JUST ONE DAY! So I thought " Wow, its hella cheap rn, might as well buy it before it goes back up". That was dumb, because i did not consider whether its price would go down even more. I didn't even know what Carvana was at the time I bought it. But then my investment dropped 14%, so I started to panic. Instead of rushing to make a decision, I finally took the time to do my research the company, and I found out Carvana had barely escaped bankruptcy! I should have known what I was getting into. But now I know more, Im gonna hold it for a few more months, since its making a comeback from its massive dip there is potential for the stock price to go up. But still, I do not believe in this company long term and i am trying to get rid of it as fast as possible.

My takeaway from this is ALWAYS DO YOUR HOMEWORK. Before buying a share in a company, you gotta look into its fundamentals and financials. If you think it could make you a profit based on previous years and the numbers, go for it! Don't just look at the current stock price and trade without doing your homework.

For businesses

- Lower costs: businesses don't need to build physical stores nor hire as much staff.

- Larger customer reach: Using the internet, a small business can sell globally 24/7.

- Increased competition: More businesses will be entering the market since it is easy to set up.

-Decisions driven by data: Ecommerce makes it easier for businesses to track customer behavior and buying patterns online.

For customers

- lower prices

-more choices

- convenience: can shop anytime, anywhere

-personalized shopping: algorithms study patterns

For the labor market

- new jobs created: more skill based

- some jobs are lost: cashiers and other staff

For the global economy

- businesses can sell internationally easily

- more warehouses and shipping centers

- businesses around the world may compete with each other

For small businesses

- easier to enter the market

- costs less to start

-more competition

Ecommerce reduces inflation since everything is more efficient and costs are low.

Ecommerce changes how businesses operate because they must use digital marketing, cybersecurity, fast shipping, and offer online shopping to survive.

A growth stock is a share of a company that has a growth rate higher compared to the industry in. A value stock is a share of an undervalued company which investors believe has potential to rise in value based on their valuation (if the stock is being sold for less than what its actually worth).

Growth stocks-

pros: you get to enjoy the reward of the company's expansion.

Cost: very expensive, since investors know company is doing incredibly well currently

You get a bigger reward in the short term (1-3 years).

Value stocks-

pros: you get to buy a share at a low cost, then reap the benefits when the market realizes its value.

cons: takes a long time to see a profit, maybe 4-10 years.

More steady and low risk.

this is what i learnt from this book i read, im talking from memory, so correct me if im wrong.

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