My rules on stocks

The following is my own summary of past mistakes, dos and don’ts…

Do Nots
1. Thou shall not buy and hold an IPO on its first day.
(my lesson from NINE, LFT and GSIT)

2. Thou shall not try to catch a falling knife. (15Oct09) On the other hand, buy on the strength (HUN, BEE).
(my lesson on Nokia, Crocs after bad earning report)

3. Thou shall not average down for an unproven stock. (15Oct09) Bought THQI too early.
(my lesson from SNDA, LFT)

4. Thou shall not bet on earnings.
(Except use option, and bet only lunch money)

5. Thou shall not buy and hold a good stock at bubble price.
(Vanke, China Merchants Bank)

6. Think first about downside and how much downside I can take: PALM (Jan/Feb 2010).

7. Moat, moat, moat (durable competitive edge, or competitive landscape, another lesson from PALM).

7. To be continued…

Reference: my stock lessons (I to VII).

Mistakes
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I think I tend to make more mistakes when my account has money: e.g., the LFT buy, not just the loss itself, but taking away my attention from CROX.

My un-scientific rules (from my own exp)
1. Take some money off the table if already up big percentage, don’t be too greed (CROX Oct 31. earning lesson);

2. Swing to lower cost, if bought too high initially, leave some money at the side;

3. A stock needs consistent attention, may turn out to be not good (NINE, CROX); vice versa (MR)

4. Retailer is not as good as wide moat co in the long run (CROX, SBUX vs. K), but how about MCD, exception?

5. Buy the stocks when
5.1 The market is weak (the company fundamental is fine)
5.2 Barron article bashing (CROX in June; recently Berkshire)

6. Sell the stocks when
6.1 People are all excited about it, news media all over it. Couple months ago the top 10 richest Chinese has 6 or 7 from real estate business.

To do
1) Learn more about fundamental analysis, working toward CFA?

2) Be more focus, less emotion,

Songs I listened when I was in 20s
Sandy Lam 林憶蓮
林憶蓮、李宗盛 - 當愛已成往事

傷痕 Scar 林憶蓮 傷痕專輯: Love, Sandy (1995)

愛上一個不回家的人

CHEN Hui Xian
Tao Wu Jie

Qian Qian Que Ge

Piao Xue

Hong Cha Guan

Sha Nv

Chen Shu Hua
Meng Xing Shi Feng

Gun Gun Hong Chen

QI Qin: Wang Shi Shui Feng

ZHAO Chuan: Ai Yao Zhen Mu Shuo Chu Kou

WANG Fei: Tian Kong (Sky)

Whitney Houston. I was a big fan of her in college. I remember spent about 10 Yuan (remember at the time the monthly allowance was like 100 Yuan) to buy her album “Hero” when I was in college.

This is a song “When you believe“, sung by her and Maria Carey.

安葬于西敏寺的英国国教主教的墓志铭：
———————–
我年少时，意气风发，踌躇满志，当时曾梦想要改变世界，但当我年事渐长，阅历增多，我发觉自己无力改变世界，于是我缩小了范围，决定改变我的国家。但这个目标还是太大了。接著我步入了中年，无奈之余，我将试图改变的对象锁定在最亲密的家人身上。但天不从人愿，他们个个还是维持原样。当我垂垂老矣，我终于顿悟了一些事：我应该先改变自己，用以身作则的方式影响家人。若我能先当家人的榜样，也许下一步就能改善我的国家，再后来我甚至可能改造整个世界，谁知道呢?
———————–

野路子(http://wulujia.com)
不论走多远，都不应忘记出发时的目标