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Rule 13: No Woulda, Shoulda, Couldas

Your head matters in this game.

You need to have it on right every day if you are going to see opportunities and act on them.

Yet so many of us have heads clouded with thoughts that genuinely throw us off target and make us do the wrong thing.

The most damaging recurring thought you can have is this:
"If only I ..." -- you can fill in the rest.

As in, "If only I had acted sooner on Electronic Arts."

Or, "I should have pulled the trigger on Nvidia ahead of that quarter."

Or, "I could have made a fortune if I had stayed short that Chesapeake Energy."

Don't get hung up on the woulda, shoulda, couldas.

This is wasted, damaging emotion.

It is destructive to the positive psychology you need when you are making investment decisions.

For a long time, I took it to an extreme.

I would sit and be mesmerized by a couple of big misses,
by things that I got wrong.

I would be obsessed, hitting up the big miss

over and over again.

Not anymore.

With the benefit of hard-fought wisdom,  I was able to see just how destructive such a pattern of thinking is.

In fact, I have had to build in methods of tricking my mind into not playing this game,

Mainly by removing the stock from my desktop and my mobile stock lists.

Just clear it out.

If you like it so much after you sold it -- go buy it back for heaven's sake.

But don't tell me what you could have done, or should have done.

You didn't.

Move on.

If you are like me, and you need help curbing this kind of destructive thinking, go to that extreme;

take the stocks off your monitor or your portfolio watch.

You will be surprised how much better you perform when you stop the woulda, shoulda, couldas.

Action Alerts Plus portfolio manager and TheStreet's founder Jim Cramer has learned a lot over his 30+ years of investing. So he created a list of 25 Rules for Investing that can help you avoid the novice pitfalls that even he fell into on occasion.

One of the biggest amateur pitfalls: Regret.

Rule 13: No Woulda, Shoulda, Couldas

Your head matters in this game....

The most damaging recurring thought you can have is this:

"If only I ..." You can fill in the rest.

That's why Cramer says not to get hung up on the "woulda, shoulda, couldas....This is wasted, damaging emotion."

So watch Rule #13 above as he talks about how he went to the extremes in the beginning of his career and beat himself up over his mistakes.


And don't forget, we are rolling out one-rule-a-day for the next 25 days! So stay tuned!

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