| If you do the complete opposite
of whatever I recommend, you are probably going to make a lot of
money. For example, lets check out my
portfolio:
E-Pawn (EPWN) down 99.9%
Micro Strategies (MSTR) down 99.8%
Brothers Coffee (BEANQ) down 97.5%
WorldCom (WCOM) down 50.0%
Janus Word Wide Fund (JAWWX) down 16.87%
How did I achieve such unbelievably
terrible results? I dunno, I guess I just know how to pick
them. So far in my investing career I have lost about
$35k. So what have I learned? Well, don't invest on
other peoples' advice for starters. Next, don't invest on
emotion either. Last, don't be afraid of cutting your losses
early instead of watching your net worth plummet.
Here is something I picked off the web:
Trading rules & thoughts of Jesse Livermore
-Never lose more than 10 percent of invested capital
in one situation. Cut losses quickly.
-Big money is made by "the sitting - not the thinking."
Don't collect profits too soon.
-Determine the trend, then play it. If there's no trend, stay out.
-Stocks are never too high to begin buying or too low to sell short.
-Major market moves anticipate events. Don't worry about the
"why's," just the "whats."
-Sideways markets are to be avoided. But in up markets you can go
long (own stocks) and in down markets you can go short (borrow
stocks from a broker, then sell them, hoping to repurchase at a
lower price.)
-Patience makes money. Understand where the market is going and what
you want before investing.
-If a stock makes a precipitous drop and fails to rebound quickly, it
is in for more losses.
-Major trend changes, accompanied by heavy volume increases, can tell
you whether to be in or out.
-"At the end of a bull market, watch for wild capitalization,
good stocks selling at 30, 40, 50, 60 times their annual earnings.
These will be the same stocks that had previously traded at much
lower multiples."
-A stock's new high can signal higher highs.
- Trade the top stocks
in top groups. Buy an industry's leader.
-As a bull market's leaders falter, it could signal the bull's end.
-Fix a point when you'd sell a stock. "You must obey your
rules!"
-Build a position by buying 20 percent of what you intend in a stock,
then add 20, then 20 more, then the final 40. Analyze at each point
to make sure what happens is what you intended.
-After a long uptrend, if stocks churn and volume builds, the end
could be near. ·
-Never meet a margin call and never average down.
-Hold cash in reserve. "My biggest mistake was in not following
this rule more often."
-Pocket some winnings from time to time. · "Emotional control
is the most essential factor in playing the market."
-Ignore all tips.
-Don't rely on hope. "Hoping a stock will do something is the
true form of gambling." Have solid reasons for holding a stock.
-To be a great trader, four strong mental characteristics are
required: observation, the ability to observe facts without
prejudice; memory, the ability to remember key events correctly,
objectively; mathematics, an easy facility with numbers; and
experience, the ability to retain and call up at will your
experiences.
-"Nothing ever changes in the market." Players change,
but "new players have no financial memory of the previous major
cycles." In addition, "What has happened . . . will happen
again and again and again. This is because human nature does not
change, and it is human emotion that always gets in the way of human
intelligence."
-Three emotions must be understood. 1. Greed is a desire for more
than one needs or deserves. Greed exists in every person. 2. Fear
can appear at any time. It distorts reason. Reasonable people act
unreasonably when afraid. And they get afraid when they start losing
money. Judgment is impaired. 3. Hope goes hand in hand with greed.
In the stock market, it distorts reason. Hope clouds facts, and the
stock market deals only in facts.
-"The stock market is never obvious. It is designed to fool most
of the people most of the time."
One of the best sites to learn how
to invest wisely is www.fool.com
If you want to be as rich as Bill Gates,
check this out: philip.greenspun.com/bg
If you are investing for fun
rather then profit, check out www.ragingbull.com |
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