Posts filed under “Rules”
GOLDEN INVESTING RULES
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.
rule: 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.
rule: 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.
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 . . .
StockCharts.com’s Chief Technical Analyst, John Murphy, has created another set of trading rules: “Ten Laws of Technical Trading:” “Which way is the market moving? How far up or down will it go? And when will it go the other way? These are the basic concerns of the technical analyst. Behind the charts and graphs and…Read More
USA Today had an interesting article this past week (it happens). The discussion was on the fact that Most Americans no good at investing. A more accurate title would have been "Humans not good at investing." There’s a very specific reason for this; It is something I am in the middle of writing up, and…Read More