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Kass: 12 Investment Principles for the Abyss

01/17/08 - 11:40 AM EST

Doug Kass

This blog post originally appeared on RealMoney Silver on Jan. 17 at 7:26 a.m. EST.

I have been concentrating on what an investor should do when he/she is staring into the abyss, and I have deduced that, regardless of market conditions, investors should adhere to the following sound investing practices:

    1. Err on the side of conservatism.

    2. Learn from the best, in classic investing books or through conversations with trustworthy individuals.

    3. Avoid advice from those who lack flexibility and are dogmatic.

    4. Be more concerned with return of capital than return on capital.

    5. Trade/invest with below-average positions in order to take advantage of the market's volatility and opportunity.

    6. Take a base on balls, hit a single, but don't go for the fences.

    7. Buy straw hats in the winter.

    8. Buy only the best of breed in periods of economic/market uncertainty.

    9. Always leg into a position.

    10. Be patient.

    11. Buy when your hands are shaking; sell when you become overconfident and complacent.

    12. Always remember investing is about common sense.




Doug Kass is founder and president of Seabreeze Partners Management, Inc., and the general partner and investment manager of Seabreeze Partners Short LP and Seabreeze Partners Short Offshore Fund, Ltd.

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