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Strategies & Market Trends : A Simple List of General Do's & Dont's of Trading:
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To: Arthur Tang who wrote (757)10/17/2006 6:40:12 AM
From: Arthur Tang   of 769
 
Many investors are greedy and want to fully invest for maximum gains. Do due diligence and commit all the resources. If risky then hedge against your investment.

The problem is the liquidity of the market. If you don't have stock distribution(round lot stockholders) in full service brokerages, you don't have many buyers to buy your holdings should you decide to bail out.

So, a study of the number of stockholders in annual reports is a must for large investment in one stock. Never be greedy. Never invest in 5% of the outstanding stock, you will be holding the bag.

The liquidity is always there for round lot investors. Maybe even a block or two for the kill.

My father taught me to invest in a market basket of 26 stocks. when the economy is good, all the stocks go up provided your companies are solvent and profitable each and every year.

And if you have one stock that goes up beyond 300% each year, you will be a millionaire. And it is true.

Most market maker trader has 16 stocks they market, and they most likely has only resources to pay attention to one stock. But they will move all the stocks they market in a good economy.

My father never said you can make your own index fund(by watching the P&L statements)?. But he was successful in picking stocks.
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