Sunday, April 22, 2012

Don't go chasing stock tips

One other important trait they possessed was the ability not to miss the wood for the trees. Good investors go about life with their eyes open.
While others were chasing the latest hot stock tip tossed out by their brokers and analysts, they would be observing consumer habits and making careful notes of any trend that might be evolving.
And rather than taking analyst reports at face value, they would test the assumptions made in the reports with their first-hand experience.
There is another thing that I have noticed about good investors: Most of them do not invest in stocks or financial instruments about which they do not possess a good understanding.