1. Rule number one: do not loose money. Rule number two: do not forget rule number one.
- Whether it's socks or stocks, I like to buy the goods quality when is marked down. Stocks have ups and downs all the time. When stocks go up then prices are really high, when they go down prices are cheap.
In real life when you want to buy yourself a good coat you wait for the mark down period, they why should you buy stock options when prices are so high?
Wait patiently till the market will propose you a good price and to recognize a good price, learn to value a good company. - It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price. Don't hurry, be patient and invest in good quality companies when prices are cheaper. You'll take less risks and get better results, just watch to not buy too expensive.
- We're just trying to be to be fearful when others are greedy and greedy when others are fearful. The ideal situation is to buy stocks that people are selling for reasons that do not concern the fundamentals of the company. To do so, you must learn to value a company and control your emotions.
- I try to buy stock in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will.
Invest into companies which are simple to understand and simple to manage. If the activity of a company is too complex, keep away from it. You won't be able to value it and if you are not able to value it you'll never know if it is a good opportunity or not. - Risk comes from not knowing what you're doing. Everybody thinks that risk comes from market volatility, that is what they learn at the commerce school. But it is a stupid thing because the real risk of investing comes from the probability to definitely loose your capital. And this probability becomes bigger when we don't know what we are doing.
If you want to buy yourself a car you spend weeks to compare prices and look for the best offers. This is common sense.
But it is strange that when we are dealing with stock options we act by impulse without thinking or reading the WHOLE financial report of a company and we just act because one line impresses us. - You just need to learn one single lesson, that it is of vital importance: to know how to value a company. It's the only way to know if you're paying a fair price, otherwise it is not investing but casino playing.
2. Invest in companies you understand
An investment you understand is a sure success. Many people ignore this but it's so important. We can take the example of Warren Buffet which has almost never invested in technology (with the exception of IBM from which he owns 5% in shares).But in general if you don't understand a company, do not invest.
3. Patience always pays
Look for quality companies but wait for good opportunity prices. It is very important to not pay too much.4. Committed managers
A company whose executives are shareholders will always be responsible in the decisions and directions it will take in the future towards its partners and investors.5. Leaders of impeccable honesty and integrity
The integrity of the company's leaders is a sign of success and confidence in the business world. It's up to you to watch over the managers of the company you've chosen.6. Buy cheap, sell expensive
This seems logical but it is easy to forget if you jump over an opportunity following an impulse that is often too expensive.7. Patience
Patience pays and investors know about it. Nevertheless if you act on an impatient mood your decisions will be less objectives.If you haven't seized an opportunity just be patience as the price will
become attractive sooner or later.
Think that the market is huge and that there are many others opportunities out there.
8. Knowledge
Knowledge is the key to success. So read, study, keep informed yourself and compare things all the time; it's the best way to be completely objective.9. Passion
Investing with passion will allow you to put the time and energy in your job as investor.10. Fear, the chance to get good opportunities
Ask yourself why values are overly sold on markets because they are often unfairly sold off, an this is an excellent opportunity for you to acquire them.11. Price is what you pay. Value is what you get.
Cheap stocks does not necessarily mean a good deal, for you may still be buying them at its highest price. You must observe its value in time to really see if it's the moment to buy.12 Motivate your decisions
Do not invest without taking the time to note down your motivations, then you can compare your writings with the reality of markets and get conclusions.13. Risk
Investing your money without controlling the risk is like being in the back seat of a car at whole speed without driver.If you can't define the rules to handle risk, do not invest.
14. Markets influence
Do not be fooled by the markets and sell your values only if they have achieved what you set out in your trading plan.15 Undervalued stock, yes, but for how long?
To buy undervalued stocks is a good opportunity, but ask yourself about the reasons for its devaluation.An event such as a takeover bid or launching a patent could bring investors interest on this value
16 Stocks smoke screen
You may think that you know a value by its image, its marketing, its name, its products... but focus your attention more on its annual reports on its figures, projections ...This approach will allow you to remain objective and have a length ahead of many investors.
17 Footnotes
You may find important revelations in the annual reports small printing footnotes.18. Short term investing for long term investments
Enjoy the markets in the short term, the companies offering good prospects in the coming years.The market often tends to amplify the good or bad short-term news which represents many opportunities for invest in promising values.
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