- The Big Picture - http://www.ritholtz.com/blog -

Louis Ehrenkrantz’ 7 Golden Rules for Investing

Posted By Barry Ritholtz On August 14, 2005 @ 10:39 am In Investing,Rules | Comments Disabled


In nearly 40 years on Wall Street, the late
Louis Ehrenkrantz, dean of American stock pickers, was known for his ability to
predict social and political developments — and identify companies that would
benefit most from those events.

First rule: develop a large appetite for
reading; it will hone your instincts for finding successful companies.

: don’t overdiversify; ten stocks, in at least three sectors, are
enough for the average investor.

Third rule: stick with your winners and sell
your losers; do not automatically sell when a stock hits a target price, but
continue to hold it as long as it performs well and has good prospects for the

Fourth rule: look for top-quality, out-of-favor companies; look for
companies that produce an array of high-quality products and/or services.

: don’t worry about earnings if a company makes a popular product; strong
earnings growth will follow.

Sixth rule: don’t tinker with your portfolio; check
your portfolio’s performance only once or twice a year.

Seventh rule: don’t be
afraid to hold cash; it’s okay to be prepared to purchase stocks with
beaten-down prices after a correction.

The great Ehrenkrantz’s rules were
published in a recent Bottom Line. [1]


UPDATE: August 16, 2005 7:01pm

A reader informs me that Mr. Ehrenkrantz passed away 6 years ago in 1999, and is no longer affiliated with the firm that still bears his name . .  .

Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2005/08/louis-ehrenkrantz-7-golden-rules-for-investing/

URLs in this post:

[1] Bottom Line.: http://www.cypen.com/pubs/2000apr.htm

Copyright © 2008 The Big Picture. All rights reserved.