Good Investing Lessons

Here is the truth about stock price trends: it tends to follow something called continuation pattern. Price trends once established, will tend to continue in it direction. This is similar to the law of physics. Taking at look at the current market, you will notice that indexes like the S&P 500, Dow Jone or Nasdaq Composite are in down trends. Depending on the type of investor or trader you are, you many want to remember this law by heart and constantly reminding yourself about this law. Some people don't like to use the terms bull market or bear market because they think that they are versatile traders and they can make money in either up trend or down trend. For, me, there is no harm in using any terms you want to describe the market as long as you have great discipline in your investing or trading strategies. I tend to use the words investing and trading interchangeably because in both cases, they are all about speculation. The difference is probably in the time horizon that ...

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...