ET Reddit Mentions | ChartExchange

( **note**: the original post was made 4 years after the dot com burst.)
44 Lessons about Stock Investing
Wednesday April 7, 2004 7:00 am ET
By Mark A. Sellers
Most of the really valuable lessons I've learned about investing have come from experience. An M.B.A. or CFA is nice, but those are only enough to get you into the game. If you want to win the game, you have to follow some rules of thumb that the textbooks won't teach you.
Here are 44 of them. You might say this is my attempt to create a Poor Richard's Almanac for stock investors, with a little bit of Murphy's Law thrown in.
1. When someone says, "Things are different this time," they're trying to sell you something.
2. Don't invest in what you don't understand. If you do, you'll eventually get burned.
3. When a company delays a financial filing for any reason, avoid buying the stock
4. Most investors are too bullish. We love being right, we love making money, and we get to do more of both when stocks are going up.
5. The financial media, too, is predisposed to being wildly bullish--television ratings and magazine subscriptions are far higher during a bull market than a bear market. Optimism sells; pessimism doesn't.
6. Even a stopped clock is right twice a day; perma-bears and perma-bulls are stopped clocks.
7. When you read an interview with a mutual fund manager, don't rush out and buy the stocks he or she recommends. Even the best portfolio managers are wrong about one third of their picks.
8. (There are exceptions to this rule, of course.)
(Exceptions to this: REITs, MLPs, and utilities.)
32. Few people care about tainted research, conflicts of interest, and stock-option abuse when the market is rising.
33. Fewer than one in 10 stocks are "long-term buys" at any given time. Thus, the ability to say "no" is much more important than the ability to say "yes."
34. Patience is a profitable virtue. Impatience is an expensive vice.
35. Few investors can resist the temptation to trade often.
36. Frequent trading is a crutch for those who don't have patience, conviction, or confidence in their ability to analyze a company.
37. You aren't right or wrong about a stock until at least a year after you've bought it. In the meantime, you're either lucky or unlucky.
38. Hold on to your winners. Often, there's a reason why they're winners.
39. The answer to "How low can it go?" is often zero.
40. Almost everyone is disappointed when stocks go down. This is illogical. Investors who expect to be net purchasers of stocks over the next 20 or 30 years should wish for a 20-year bear market in which stocks become screaming bargains, followed by the greatest bull market in history just as they're cashing out.
41. When a company gets more than 15% of sales from any one customer, tread carefully.
42. Nearly everyone on the Forbes 400 list of richest Americans falls into one of three categories: entrepreneurs, buy-and-hold investors, and those who inherited their money. Only a couple of market-timers and technical investors are on the list, and there are no day traders.
43. Most stocks are slightly overvalued most of the time.
44. Most people spend a lot more time thinking about reward than about risk. They've got it backwards.

.dark-mode .Rg4MHJ{ color: white; background-color: #333333; border: 2px solid white; }.light-mode .Rg4MHJ{ color: #333333; background-color: white; border: 2px solid #333333; }ETEnergy Transfer LP Common Units representing limited partner interestsstock NYSE

ET
Energy Transfer LP Common Units representing limited partner interests
stock NYSE