I hope you all liked Part 1 of Market Wisdom by Jesse. In Part 2, I will share the facts by another pundit, Bernard Baruch. You would notice, though these people are different, yet they are trying to teach us all the same thing. Discipline and Do not speculate.
Wisdom by Bernard Baruch-
1. Don't speculate unless you can make it a full-time job.
2. Beware of barbers, beauticians, waiters, taxi drivers — of anyone — bringing gifts of "inside" information or "tips."
3. Before you buy a security, find out everything you can about the company, its management and competitors, its earnings and possibilities for growth.
4. Don't try to buy at the bottom and sell at the top. This can't be done — except by liars. [This is an important fact that bottoms and tops just can't be traded. No one knows about it when they occur. People only know it after the fact and then they would claim how they spotted it. Those who claim to have it spotted very well, must show a history of it to have the skills acknowledged. Else, it was just a pure luck and one shouldn't trade on luck]
5. Learn how to take your losses quickly and cleanly. Don't expect to be right all the time. If you have made a mistake, cut your losses as quickly as possible.
6. Don't buy too many different securities. Better have only a few investments which can be watched.
7. Make a periodic reappraisal of all your investments to see whether changing developments have altered their prospects.
8. Study your tax position to know when you can sell to greatest advantage.
9. Always keep a good part of your capital in a cash reserve. Never invest all your funds.
10. Don't try to be a jack of all investments. Stick to the field you know best.
Hope you enjoy it.
Nitin
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