|
|
|
Editor's View
Operating Earnings Scan
Favorite Small Caps
Stock Scan
Quarterly Revenue Increases
Updates
Recent Gainers
Thumb Nails
Stock of The Month
Penny Picks
MicroCap Stocks
Recent News
Back to Beginning
Disclosure
Copyright & copy; 1999
Russ Reports
|
|---|
SENSIBLE INVESTMENT RULES
Here are a few rules that I cooked up for myself when I started
investing in the markets some 40 years ago. They still apply and
you can add a few of your own as time goes bye.
1. Learn to read a balance sheet but watch out for those nice
glittering and colorful pages that seem to detract you from reading
that small print or even the large print. Beware of distractions
in the pages of those annual reports. Learn to read the pages in
the back of the report - where all the hard figures are explained
and the legal problems, if any, are exposed.
2. Don't invest in any company that has become entangled in what
seems to be a drawn out legal battle - such as patent infringement
or copy right infringement, etc.
3. Don't invest in any company that you can't seem to figure out
the balance sheet. Some companies that I avoid are "Banks" "Insurance
Companies" and some "Mortgage Companies". They can do a lot with a
balance sheet that will make you scratch your head until your fingers
are nubs and still you can't figure out the balance sheet.
4. Don't invest any money that you cannot afford to lose. Low price
stocks are risky at times and should be considered as such. Keep the
overall dollar commitment small in those low price stocks even if you
have money to burn.
5. Don't invest with the idea of getting rich quick.
Stocks purchased on the NASDAQ (OTC) take some time to grow in value.
Be prepared to wait at least a year or two for substantial gain.
6. Do establish a goal on each purchase before you buy. Do you want
30% profit, 40% profit or more? If your stock reaches that goal, be
disciplined enough to sell and take your profit.
7. Do try to purchase more than 100 shares of each stock. Buy 200
or more so that if you reach your goal, you can sell part of your position
and retain the rest for additional gain (we hope).
8. Don't chase a stock if it goes higher than your buy price. Many
times a stock will spurt up only to come back down when the short term
traders made their money on a 2 or 3 point quick gain.
9. Do try to set reasonable limit prices on both Buy and Sell orders.
That way you will not get burned on any quick rise in a stock purchase
or lose on any selling that you may do. If you are taking a position
in a stock that is not being turned over fast by trading action, then
I would suggest that a "market order" is in order. That way you will
be sure to get the shares you want at a reasonable price. (If you are
not sure what a "limit" order is, contact your broker.
10. Do contact your broker or other source for information that you
use to get up-to-date information or news on the stock you are thinking
about. Don't get stuck by news that you are not aware of.
11. Don't be greedy! Remember that sage saying, "Bulls make money and
Bears make money - but Hogs get STUCK".
12. Just have to add this final warning: Don't get sucked in by those
HYPSTERS on the net who want to get you entangled into some worthless
stock on the OTC-BB. Most of them are not worth the paper they are printed on.
It is almost impossible for the average person to get information on those
stocks and they do not have to conform with all of the rules and regs. outlined
by the SEC until they become a "fully reporting" company.
13. A market maker in those penny stocks can manipulate the prices so quickly,
sell out a bundle of shares and even cease being a market maker. That leaves
those penny stocks without anyone making a market in that stock and it sometimes
disappears from trading and the holders have worthless paper at least until the company
can persuade some other firm to be its Market Maker.
Please Beware of the small Bulletin Board Stocks. Some are O.K. but most are not worth a CENT and all of the SPAMMING and HYPE won't make them another NIKE, AMAZON, YAHOO or IBM
