Most successful investors that I have heard or read say that discipline is an important part of their success.
The major losses that I have from JD's recommendations is where I chased stocks with falling prices by buying more. JD's newsletter and hot line can make you do that if you don't have discipline.
I have learned something about JD and about my self in the past 12 months.
There are some stocks, such as FFS, that I bought more of, that I believe are good value plays and are good investments for the long run. I don't regret owning them.
There are others, such as CPPKY, that were far-out recommendations that JD should have learned that information was difficult to get and not have recommended them, and I should have been smart enough not to follow his recommendation blindly because I had no source of news about the company other than JD.
I certainly learned a lot about buying more shares in a falling stock. I learned that I should do extensive research before buying more. That is a step of discipline that I hope I will always remember and practice. If so, maybe I will grow as an investor.
There is an example on diversification that I have seen often, which takes several stocks and shows overall return, something like this,
Original Cost....Value in 5 years....Gain or loss
10000..................55000.............45000
10000..................30000.............20000
10000..................10000...............0
10000...................5000..............-5000
10000.....................0................-10000
The total return for the portfolio is 50000, doubling in 5 years, even though three of the five were poor investments. Not too bad!! But if you had chased the two losers by continuing to pour good money after bad, your results would have been a disaster.
I believe that your practice of watching JD's recommendations a while before buying is a wise one. I guess that I should add that to my steps of discipline. |
