Found these on Alert Investor and thought I'd share them here, going into the new year.
THE 18 COMMANDMENTS OF INVESTING
1. LET YOUR WINNERS RUN AND CUT YOUR LOSERS SHORT, NOT THE OPPOSITE - MOST PEOPLE DO THE OPPOSITE.
2. ANALYZE STOCKS AS IF YOU DIDN'T OWN THEM - IF IT'S NOT A BUY, IT'S A SELL. YOU'RE NOT ON A CRUSADE AND YOU'RE NOT IN A MARRIAGE.
3. HOPE AND LOYALTY ARE THE INVESTOR'S ENEMIES - THEY PREVENT YOU FROM BEING OBJECTIVE. DON'T GET MARRIED TO A STOCK, NO MATTER HOW MUCH WORK YOU DID ON IT AND NO MATTER WHAT YOU PAID FOR IT. "LONG TERM" IS A LIE !
4. GOOD FUNDAMENTALS WON'T BE A SECRET FOREVER, BUT THE WORD CAN TAKE TOO LONG TO GET OUT.
5. YOU CAN'T BUY AT THE BOTTOM AND SELL AT THE TOP - ONLY LIARS CAN.
6. MOST PEOPLE WILL HOLD A STOCK UNTIL THEY BREAK EVEN. THEY SUCCEED 80% OF THE TIME WITH THEIR WINNERS AND 5% OF THE TIME WITH THEIR LOSERS. BAD ODDS ! THE STOCK'S REAL PRICE IS NOT WHAT YOU PAID FOR IT, IT'S WHAT IT'S TRADING AT RIGHT NOW.
7. YOU CAN'T OWN EVERYTHING - YOU'LL MISS SOME WINNERS.
8. GOOD COMPANIES CAN HAVE LOW PE'S FOR A LONG TIME AND BAD COMPANIES CAN HAVE HIGH PE'S FOR QUITE A WHILE. G0 WITH THE FLOW, THE TREND IS YOUR FRIEND.
9. CHARTS DON'T LIE, BUT PEOPLE DO ALL THE TIME - TIPSTERS, MANAGEMENT, P.R.
PEOPLE AND CHAT-BOARD KNOW-NOTHINGS. AND YOUR BUDDIES MIGHT BE ROMANTICS.
10. BUY WHEN THE VOLUME INCREASES AND THINK ABOUT SELLING WHEN THE VOLUME DROPS OFF. IT'S THE MARKET TALKING.
11. NEVER BE SORRY TO TAKE A PROFIT - LET SOMEONE ELSE MAKE MONEY ON THE
STOCK, AND MOVE ON TO THE NEXT ONE.
12. DON'T BUY ANYTHING BASED ON HOW THE PRODUCTS SOUND - EVERYTHING LOOKS GOOD TO THE LAYMAN. THE ONLY PROOF OF SUCCESS IS ORDERS BY THE COMPANY'S CUSTOMERS.
13. IT'S EASIER FOR A COMPANY TO MAKE MONEY WHEN REVENUES ARE RISING FAST THAN WHEN THEY HAVE TO CUT COSTS.
14. DON'T BUY COMPANIES WITH THE WORD "CONCEPTS" IN THEIR NAME - WHAT REAL BUSINESS WITH REAL PRODUCTS IS DESCRIBED BY THE WORD "CONCEPTS"? NONE.
15. IF YOU SEE THE WORDS "ECSTATIC", "EXCITED", "EUPHORIC" OR "TREMENDOUS" IN
A COMPANY'S PRESS RELEASE, SELL. THE INSIDERS ARE ABOUT TO DUMP.
16. IN YOUR PORTFOLIO, TRY TO KEEP UP WITH DOW ON UP DAYS AND DO A LITTLE
BETTER ON DOWN DAYS - YOU'LL MAKE A LOT OF MONEY. THE NASDAQ IS NOT A REAL AVERAGE, IT'S REALLY ONLY 5 STOCKS.
17. DON'T SELL A GOOD STOCK JUST BECAUSE YOU WANT TO BUY ANOTHER STOCK -
THAT'S THE TAIL WAGGING THE DOG. KEEP SOME POWDER DRY AND "PRUNE" YOUR LOSERS ALL THE TIME. IT'LL KEEP YOU OUT OF TROUBLE.
18. INSIDE INFORMATION IS THE WORST KIND. EVERY MANAGER IS EXCITED ABOUT HIS COMPANY AND THINKS THAT THE NEXT PRESS RELEASE WILL BE EARTH-SHATTERING. HE ALSO KNOWS NEXT TO NOTHING ABOUT VALUATIONS, MARKET TRENDS OR WHAT HIS COMPETITORS ARE UP TO. |
