Give Me an Edge -- Or I Won't Play

Each time I review my game plan for the market, I assume I am wrong. I regularly imagine developments evolving in the opposite direction from my expectations. Success takes care of itself. Superb money management occurs when things go wrong, yet action can be taken because adversity has been anticipated.

I also assume I am wrong when I select specific turnaround companies to invest in. That's why my paramount concern is finding companies that are so undervalued that if I'm wrong -- and the business does not turn around -- I can exit the position with a minimal loss, if any.

When I post a new recommendation on RealMoney.com, it is only after roughly 90% of my research effort has been devoted to examining the downside risk of that position. But with each selection, I'm not much concerned about upside. I concentrate on isolating the variables in each company's equation that could cause the turnaround effort to fail and how that would affect the stock price. ...