In fact, there are so many stock investors around the world, how many of them are really know how to invest in stock? I guess less than 10%? Well, perhaps less than 5%? I mean those people who consistently making profits from stock market.
Well, for most of the successful stock investors, they have a common traits, discipline and follow the rules. I believe this is very true, and Warren Buffet should raise his legs to support this phrase. Are you one of Warren Buffet followers? If you are not, and you wish to trade like Him, perhaps there are 10 important rules you should really take into consideration.
So many trading rules around, which one to remember?
Rule $10
If you think a good investor must be pro in accounting, you better be a waiter then.
To be a stock investor, what you need are only simple +, -, x, / and % calculations. You also need to gather every information about the company you want to invest, visit it if necessary, understand the business structure and how it brings revenue to the shareholders.
Rule $9
You won't have much profit to reap, if you only pick hot stock.
It's time to let it goes, if the particular stock price is up dramatically. And get ready to enter, if it drops heavily. Like Mr.Warren, he bought China Petroleum and continuously hold it for years when the company is on board.
China Petroleum insanely went up to new high during year 2007, where many investors are continue to sleep on it. At that time, Warren sold all his shares in hand at HKD12.4 per unit. After that, it did shoot up above HKD20. And finally, it significantly falls back to single digit price within a very short period.
Rule $8
Don't ever ask a barber whether it's time for you to cut your hair.
It make sense that we consult our trading problems with our financial consultant or broker. The truth is, we can simply find them out by ourselves. In short, financial consultant, broker, bank investor, lawyer, mechanic, doctor are all the same. They are solving people's problem to keep them survive. For the sake to survive, they will try their best to find out 'problem' from you. Does it make sense to you?
You want people to see you as the worst lover, in fact you are great or, you want people to treat you as a great lover, but you are lousy in reality?
The rule of thumb is to have your own thinking. You don't have to follow other's opinion or analyst's report. You don't even care about how people think of you. We only need to focus on the fact and truth without interruption from others.
Rule $6
When you are in a baseball game, you cannot just simply hit the ball without confident.
To be a pro in a baseball game, you must wait for an opportunity to hit the ball. It's the same like a stock investor, you must be patient to wait for your opportunity. If you cannot foresee the company future, don't invest it. If the company has not earn a single cent, it will be unlikely to make you a cent either.
Since there are about 10 rules, I tried my best to keep it simple and short. I'll continue the rest of the rules in my next post. Stay tune.
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