Think of Trades as Tiny Business Ventures

Marcus Lemonis: An adaptive trend-following trader of private businesses

I think of each trade as a tiny business venture. I give each one a small allocation if it shows some promise. I keep it if it makes my investors and me money. I get rid of it if it loses us money.

“The Profit” is my favorite TV show. Unlike the guys and gals on Shark Tank, Marcus opens himself up to his new business partners. He shares not only his business philosophy, but also a part of himself. He doesn’t hide his intentions or his strategy to improve the business.

Whenever I watch the show, I cannot help but think that Marcus would be a great trader. He understands and executes on the practical common sense principles that work. More importantly, he understands himself. He doesn’t deviate from his investing principles, especially when the business is struggling.

He diversifies; he studies the business, the market and their trends; he makes small bets; he adds to his investment when it performs well and cuts it when it struggles. Simple stuff.

This is a sound strategy for investing; period — whether it be private investing or trading public markets. He says he does not invest in the stock market at all, but I bet he would do well by simply applying his current strategy to stocks, bonds or anything else.

My favorite part about The Profit is that Marcus shows you how a successful businessman works — for free. I learn better by watching than reading as I bet a lot of you do.

In your own investing, I encourage you to follow the principles Marcus openly executes on CNBC every week. Taking a page or two from adaptive strategy playbook can go a long way to helping you improve your own performance and avoiding major losses.