It seems that the broad markets are starting to get fed up with going down. Abby Cohen, of Goldman Sachs, joined strategists from Morgan Stanley Dean Witter and Merrill Lynch in urging clients to start bottom-fishing. This time I believe they may be right, especially ahead of the next Fed meeting, where a healthy cut in rates can be expected.

Brett Fromson: Winning in a Post-Bubble Market

Jim Cramer: How to Solve Your Portfolio's Janus Problem

Gary B. Smith: Quit Waiting for the Big Blowoff

Fund Junkie: Is Buy and Hold Dead? Or Just the Wrong Question?

John Rubino: Hot-Money Havens for the Post-Bear Market

David Donnelly: Here's What Not to Do

Fund Junkie: Time to Say Goodbye to That Struggling Tech Fund?

Jim Cramer: A 'Do-It-Yourself' Attitude Can Be Perilous

Best Sectors For a Rate Ease

Many of the leading European technology stocks that I follow are giving short-term buy signals on my charts. So, if a decent rally gets under way, the potential gains are considerable. Of course, there is still a danger of specific stock risk from "bolt-out-of-the-blue" announcements, like the Intel (INTC:Nasdaq - news - boards) one last week, so get a good spread of stocks rather than a single-shot pick as an insurance policy. Also, stick to the big marketable leaders with good liquidity, in case I am wrong and you need to bail out. It is always important to make sure there is an exit.

This may be the beginning of an important turning point, so I thought this week I would give five general rules to investing which I have followed for many years, and that have kept me in business.

First, markets, like all commodities, are driven by supply and demand. This may be obvious, but easily forgotten, when blinded by too much real time information and emotion. So, the drivers are those that cause change in the supply/demand equation.

The most important driver is the level of interest rates. If you can get 10% from a bank from your cash on deposit, why take a risk -- it's a no-brainer. However, if rates go down, to say 3%, you will search for a better return elsewhere. Hence, go with the wind rather than against it -- if rates are coming down, buy equities and vice versa.

Second, the whole industry is geared to the buy side -- billions of dollars are invested in resources channeling your savings into the market. Many salesmen and analysts are obsessed with what price to pay for an asset/security, spewing out thousands of reports a week that say such-and-such is cheap, because it is on a multiple of 7, etc, etc.

These people don't understand that it doesn't matter what price you pay for a security -- what matters is the price you sell it at, and when. If you buy a stock on a multiple of 70 and sell it on a multiple of 80 you will make a profit. So before you buy, work out your target price and when, and how you expect to exit. If that price is sufficiently higher than the prevailing price, and you can definitely exit, then invest. Otherwise, move on.

Moreover, it's not a pleasant experience being told by your broker when you want to sell that, "Sorry, there is no market, as the stock is illiquid." So, my advice is to stick to the big companies. Ignore those who say you can only make decent profits out of small special situations. You can, but you need to be lucky, and it's painful when your luck runs out.

Third, most people in the market are compulsive dealers -- they spend 90% of their time dealing and only 10% of their time thinking. If you can reverse that statistic, you have a chance of making money -- and you still need luck!

Fourth, if you miss an opportunity, don't worry about it, as there is always another bus coming. As a dealer who trained me many years ago said:

"Investing is simple. Don't worry about what the company does, or who runs it. It's like commuting: If a bus comes along and everyone wants to get on, be one of the first to get on board. Then, for goodness sake, sit next to the exit, and don't wait to get killed in the crush as the bus comes to a halt. Hop off as it's slowing down, when you can hear the people on the top deck starting to shuffle their feet."

He was a simple soul who only believed in supply and demand. Of course, the smart brokers laughed at his philosophy. But he retired young, a multimillionaire.

Finally, the fifth and most important rule. Have a rigid stop-loss policy. In managing our fund, we use a combination of fundamental and technical analysis to arrive at judgments. If we really believe a stock we bought should be going up, and instead it falls, we put a big effort into trying to find out why.

Managing the losses is more important than profits, which take care of themselves. So, if we find out that Goldman Sachs is downgrading the stock we can live with that, because Goldman may be wrong. However, if we can't find out and the stock drops 10% from our cost, we sell. I have drilled into my team the following dictum:

If you can't find out who the seller is, and why, then assume it is God. He is bigger than we are, and knows more, too. So don't argue with him, just get out.

I hope these thoughts will help.

I have now run out of space for this week, during which Siemens (SMAWY:Nasdaq ADR - news - boards) gets its New York listing on Monday.

Tuesday brings final results from Credit Suisse Group (CSGKY:Nasdaq ADR - news - boards).

Wednesday we have finals from BASF (BF:NYSE - news - boards), Interbrew and Axa (AXA:NYSE ADR - news - boards)

On Thursday, Corus Group (CGA:NYSE ADR - news - boards), Cap Gemini, P&O Princess Cruises (POC:NYSE ADR - news - boards) and Suez Lyonnaise all report.

We also have the European Central Bank meeting on Thursday -- will it finally move on rates? My guess is 1/4%. On Friday, OPEC meets in Vienna, and will once again reinforce the target of $25 oil.