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3 ways to trade like a shark: O'Leary

Kevin O'Leary
Adam Jeffery | CNBC
Kevin O'Leary

"I love dividends. In dividends I trust. In cash I believe."

That is the trading mantra of entrepreneur and investor Kevin O'Leary, best known for his appearances on "Shark Tank."

While stocks showed signs of life on Friday, they fell sharply Thursday, spurred by volatility in China. On CNBC's "Halftime Report" on Wednesday, O'Leary offered up three tips to investors seeking to get an edge in this tumultuous market.


1. Be patient. Strike at the right moment

"You don't have to just own utilities," he said. "Lots of companies have shareholders just like me howling at the moon saying 'give me return of capital.'"

That's why O'Leary loves companies like Apple.

The tech company revealed in October that its cash pile topped $200 billion for the second quarter in a row, hitting $205.7 billion for the fiscal fourth quarter.

However, despite Apple beating quarterly earnings and revenue last quarter, O'Leary said it might be time to take a pass on this stock.

"But if it has to pay a 40 percent tithe to repatriate capital based on our screwed up tax system, that's not going to work," O'Leary said. "It's going to have to keep issuing debt, which is going to make its balance sheet look worse and worse over time."

O'Leary plans to wait for Apple stock to hit around $80 before purchasing. The stock is currently trading at around $97, up 1 percent from Thursday's close.

2. Find the upside

While oil has already fallen to its lowest price in 12 years, O'Leary thinks it could still drop lower — and it might be a good thing.

"Let's assume oil goes to $18," O'Leary said. "What an incredible engine of growth it is for the other nine sectors of the S&P."

While many investors focus on the portion of the S&P that would suffer on such a dip in oil prices, O'Leary says that there could be an upside.

"My goodness, if we could have an economy with a zero-input cost, I want to be there," he said. "Yeah, bad for energy guys, good for everybody else."

3. Go for market share

Netflix celebrated its launch of service in 130 new countries on Wednesday, but the "Shark Tank" investor thinks that the company doesn't need to move to international markets.

"It doesn't have to make money in international countries; nobody cares," he said. "It's a market share grab; the volatility is crazy."

Netflix is part of a "viciously competitive space," he says, "and yet [it] is still getting the benefit of the doubt that [it is] going to the one that survives."