Nice set of rules from Wallace Witkowski of MarketWatch:

10 lessons from the market crash of 1987

1. Stay objective when others get emotional
2. Be like Buffett: Buy on the fear, sell on the greed
3. Make a crash shopping list
4. What goes up fast comes down faster
5. There’s no such thing as ‘it can’t happen’
6. Tune out the daily noise
7. Don’t bail
8. Don’t use the calendar to rebalance your portfolio
9. Bet with your head, not over it
10. Investors face greater risk now



10 lessons from the market crash of 1987
Wallace Witkowski
MarketWatch, Oct. 19, 2012

Category: Investing, Psychology, Rules

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5 Responses to “10 Lessons from 1987 Market Crash”

  1. crutcher says:

    I especially like rule 3. If you know companies that have the financial strength and fundamentals to recover from panics, and can wait for them to be selling for pennies on the dollar because of margin calls etc., you have a high probability of success. BUT – in that situation you have no time for DD – hence, the wisdom of building up a wishlist. Great call. I’m ready to do 2008-2009 all over again, 3 years too late.

  2. wally says:

    “3. Make a crash shopping list”

    It’s tough to buy the bargains when you just lost your shirt.

  3. Iamthe50percent says:

    Wally, always keep a cash reserve. Never be all in. That’s like putting all your chips on one number/one spin in Vegas.

  4. BennyProfane says:

    “6. Tune out the daily noise”

    But, isn’t that the biggest boom, and your signal to buy?

  5. No, absolutely not

    I prefer to look at Weekly charts, not Daily. Day-to-day action is mostly noise.

    We don’t have TVs on in the office, either. If you walked into your doctors office and saw General Hospital, you would walk out.