50 Rules Of InvestingJacob Wolinsky
50 rules on investing – I was asked to partake by the kind folks at Stokz based out of Lodw Poland – here is my answer ( but since its a lead in I also pasted the prior conversation to mine) I believe this for even more than the reasons i discussed and here is my raw answer, which is slightly different than the edited one:
1. Do not take investing advice from ANYONE. There are a few reasons but one being that it is hard to determine between skill and luck. Another is that no one knows how diversified you are. You can have the best guru advice you to buy X stock but he will be wrong 40% of the time and if you put all your money in there you can lose every penny. Another reason is that person does not know when you will sell – maybe it was a good investment but you should have sold five years ago or maybe its been a year but you should have held on for another four. These are among a few reasons to be cautious when asking or taking advice from anyone, especially myself!
- Take media reports with a large pinch of salt.
You may read endless tips and rules online, but you still want to hear every bit about your company immediately. You read tons of reports and analyses, browse industry news and listen to comments. But enough is enough, really. Media news and stories tend to reproduce what’s already been said. With not much of attention to detail, let alone added value. Media run on emotions so they inflate bad news. They also run on advertising money, so often inflate good news and PR communication. Don’t let them damage your reasoning and logical thinkin.
- Stay away from Market Magicians.
Jacob Wolinsky, form ValueWalk.com, will tell you more about this point:
“For sure you often see advertisements screaming “I CHANGED 100$ to 1M $ in ONE YEAR” and may wonder what you’re doing wrong with your portfolio. It’s fool’s gold. It’s plainly a scam, barely legal advertisement which should be taken down by the regulator. Don’t let anyone advice you. They don’t know how diversified you are, know nothing about your risk aversion and have no idea when you will enter and leave market.
It’s OK if you don’t believe this tip, so start watching your Magician. Read his posts, recommendations, research. Validate his rate of return. Maybe even engage in a discussion on investment strategy or prospects of specific instruments. Make your own judgement. Many people have strategies which work for them and bring them millions. No successful trader or investor would ever spend time online selling his priceless strategy for peanuts.”
Read the full piece here