The biggest mistake novice and millennial investors are making is investing based on headlines and hype and not understanding the real performance of the business they’re buying a piece of, Robert Leonard, VP of Growth and Innovation at The Investor’s Podcast Network, told Ash Bennington during today’s Real Vision Daily Briefing.

Leonard said that newer investors need to understand that exponential growth isn’t sustainable forever and they should take a more conservative approach when making models and doing analysis, like looking for companies with high cash flow and strong balance sheets that are benefitting from the current environment.

Instead, many millennial investors are buying up companies like Tesla, which just announced a 5-for-1 stock split that will make its shares even more accessible to small retail investors.

Leonard said he thinks the split is fine fundamentally, but what has happened as a result is ridiculous. With no real change in the company fundamentals, he said there’s no reason for the run up; it is being driven by millennial psychology.

He argued that millennials are investing in the idea of companies and not the actual financials of companies like Tesla. “No one is looking at the fundamentals of that company and thinking that valuation makes sense,” he said. “They’re thinking Tesla is the car company of the future, Elon Musk is the CEO of the future, and they believe in what he’s doing, so they continue to buy the company.”

This philosophy can put new investors in a dangerous position; they’ve only invested since the last crash, so they think the market only goes up. The problem with this approach, Leonard said, is that markets can go down as well – in fact, he thinks the next 18 months could get very rocky for newer investors.

What will they do when markets get choppy? Leonard said he thinks we’ll see smaller retail investors continue to buy dips until large players pull out of the markets and really drag the market down.

“People think a dip is an opportunity without understanding the underlying business,” he said. “Once they have success, they think it is going to be the same every time.”