Definitive Guide To Stock Investment

After more than 30 years of active investment in stocks using a number of strategies, I believe I have a wealth of experience to share with the neophytes.  (Yea, right!)  I have hold on (long term) and day trade stocks, I have bought / sold puts / calls, blue chip or penny stocks and almost everything in between, I have invested in almost all industries, and I have made and lost money.  So here is my definitive guide to investment in no particular order.  They are all life lessons I have learned, a few very costly!

1. Long Term Investment - if a broker tells you that you should be in for long term, they are basically telling you that the market is so volatile that all your investments will probably tank but because you are in for the long haul, you will not blame or sue him or her.  Corollary: your broker does not know what he or she is talking about.  More corollary: when you are ready to cash in the money after a long term of investment, the value may have dropped by then even though it could also have risen many folds!
2. More Long Term Investment - if you are not using a broker and long term investment seems to make sense to you, you are probably lazy.  You just don't want to bother with the research of the companies you have invested in, what people are buying or selling or needing or wanting, who are the real competitors, etc. etc., and you are just hoping that money will grow like rabbits.  Corollary: you are in dreamland.
3. Timing Is Everything - It's amazing how many brokers will tell you that as long as you are in for the long haul, it does not matter at what price you are buying.  That is not true.  Timing is everything.  You never know how things are going to change.  So be careful if a stock keeps climbing, either make a move early in the game or wait till it drops.  All momentum stocks eventually need a break.  There are big breaks and there are small breaks, and there are always big breaks!  Corollary: patience is everything.
4. Investment Newsletters - don't trust any investment newsletters that come across your desk or your browser.  Everyone has his or her own agenda, even the author who claims he or she has no money invested in the stock they write about or plan to purchase any.  No one sees the future, so no one knows what will happen.  The only difference among the writers is how well they can write to touch something in you!  Corollary: watch out where your weak spot is.  One of these newsletters will get you.
5. Stock Investment is Ethical Gambling - the world is so volatile now that there is no logic in the market, so even if you have the time and resource to do it, and if you have good resources of information (which the previous points basically indicate that this is impossible), your investment is no different than going to the casinos.  Corollary: you have, and we all do, have a tendency to gamble.
6. Something Bigger Out There – if you think the market is just driven by buyers and sellers, big and small companies, brokers and brokerage houses, you need to think again!  There are much larger institutions, like governments, countries, very very very rich and powerful people and organizations out there that can manipulate the markets beyond what you can ever think or imagine.  Corollary: you are only a pawn (or prawn, or even better a shrimp) in this ocean of sharks.

So what is the conclusion?  Eat, drink, and be merry.  Enjoy your money, use it, spend it, give it away, and be free of all these toils and troubles.