Brian Feroldi – Be Careful When Trading Options

<p><strong>BIO: </strong>Brian Feroldi is a financial educator, YouTuber, and author. His career mission statement is “to demystify finance.”</p><p><strong>STORY: </strong>Brian invested in an oil pipeline company with take-or-pay contracts. This meant that the company would get paid either way if the price of oil or natural gas went up or down. Prices went down and despite the contract, the pipeline’s stock went down because its customers couldn’t afford to pay. Brian lost 70% of his entire portfolio.</p><p><strong>LEARNING: </strong>Don’t use options as an investment strategy. Never let one company become your largest position. Be careful about trying to leverage beyond your capability.</p><p>&nbsp;</p><blockquote class="ql-align-center"><strong>“When my research makes me unbelievably bullish about something, that probably means I’m blind to some risk.”</strong></blockquote><blockquote class="ql-align-center">Brian Feroldi</blockquote><p>&nbsp;</p><h2>Guest profile</h2><p><a href="https://www.linkedin.com/in/brianferoldi/" rel="noopener noreferrer" target="_blank"><strong>Brian Feroldi</strong></a> is a financial educator, <a href="https://www.youtube.com/brianferoldiYT" rel="noopener noreferrer" target="_blank">YouTuber</a>, and <a href="https://amzn.to/3ZKbDgJ" rel="noopener noreferrer" target="_blank">author</a>. His career mission statement is “to demystify finance.” He loves to help other people do better with their money, especially their investments. He has written more than 3,000 articles on stocks, investing, and personal finance for the Motley Fool.</p><h2>Worst investment ever</h2><p>Brian invested in a company in 2013, about nine years into his investing journey. Though not an expert, he completely understood business fundamentals. He had a framework for what kind of companies he was going after. The company Brian invested in was Kinder Morgan, an oil pipeline company. That means they don’t go out and find the oil but own and operate pipelines that move oil and natural gas from the extraction point