Secondly -- and this is even more important -- losses are a part of investing. The best stock-picker in the universe buys stocks that go down. That doesn't matter; what does is whether you recognize that reality and have a plan in place to deal with it.
10. 'I got a great stock tip.'
Stock tips are the last refuge of equity scoundrels. It's lazy, irresponsible and just plain foolish.
The plain truth is that the vast majority of "tips" are for horrific little stocks that don't have a snowball's chance in hell of ever amounting to anything -- at least not on a sustainable basis. In fact, many so-called tips are nothing more than the work of stock touts -- paid weasels whose sole job in life is to run up the price of some worthless piece of junk so unscrupulous sellers can exit at a desirable price. The "tip" investor is usually left holding the bag.
Ask yourself the following of all tipsters: What's their motivation? How good is their information? (If it's too good, well, then you shouldn't be using it anyway.) What is their track record?I never trade on tips, but I have a network of other pros whom I regularly swap ideas with. This is very different than a "tip." I deal with one trader who knows the gaming sector inside out -- that's his expertise. He's helped make his (and my own) clients a fortune. Another is an analyst (Charlie Wolf of Needham) who covers the PC sector -- he got me into Apple (AAPL - Get Report) at the bottom and out of Dell (DELL - Get Report) at the top. I sift through Cody Willard's
|1.||Expect to Be Wrong||2.||Your Fault, Reader|
|3.||The Wrong Crowd||4.||Bull or Bear? Neither|
|5.||Know Thyself||6.||Prepare for Battle|
|7.||Bite Your Tongue||8.||Don't Speak, Part 2|
|Check back for more of Barry Ritholtz's
Apprenticed Investor series