Good Investing Lessons

Never Turn Trades into Investment When the market move against you, cut loss. If you are hoping for the trade to turn good, you know you are done. What is the probability of a bad trade turn good? How long will you wait? Your First Loss Is Your Best Loss When you trade turn awry, cut loss fast. The subsequent loss is likely to be more severe. When a stock is down, its momentum tends to move it down further. The only hope you have is when there is a knee jerk reaction where the sell down comes with spike in volume. Chances are you will get quick reversal. Other than that, just cut off and move on. It Is OK To Take Loss When You Already Have One Losses, realized or unrealized, are actual losses. Unrealized losses if not taken, may lead to bigger losses. Don't let you capital sit there even if the capital is depleted. Move them to a better place. Never Turn a Trade Gain Into Investment Do not be too greedy. Know when to get out. Market can turn anytime. When it comes, it may be

Jim Cramer: Even at the height of my firm, Cramer Berkowirtz, I managed only about $450 million for a bunch of wealthy families, a pittance compared to the major mutual funds arid some large hedge funds that control the marginal dollar that determines stock prices at the end of' the day. I mention this to drill into your head the importance considering supply and demand of the stock at all times. That's because way too many people get confused; they think we are trading the actual companies themselves, that the pieces of paper we are trading, investing, owning, are sort of redemptive right, a coupon that will give you certain cents off, or an ownership right that will allow You to have a chunk of the brick and. mortar if not the cash in the treasury of' the joint, Untrue. These are, in the end, simply pieces of paper, to be bought, sold, or manipulated up and down by those with more capital than others. All other investment books stress the linkage between the stock and the