Some good advice from the great investor and philanthropist Warren Buffett (to properly play the alt game):
(
http://en.wikipedia.org/wiki/Warren_Buffett)
• You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right.
• Wide diversification is only required when investors do not understand what they are doing.
• Never invest in a business you cannot understand.
• Unless you can watch your
stock alts holding decline by 50% without becoming panic-stricken, you should not be in the
stock market alt -market.
• Why not invest your assets in the companies you really like? As Mae West said, "Too much of a good thing can be wonderful".
• Risk can be greatly reduced by concentrating on only a few holdings.
• Stop trying to predict the direction of the
stock alt market, the economy, interest rates, or elections.
• Be fearful when others are greedy and greedy only when others are fearful.
• It is optimism that is the enemy of the rational buyer.
• As far as you are concerned, the
stock alt market does not exist. Ignore it.
• The ability to say "no" is a tremendous advantage for an investor.
• Much success can be attributed to inactivity. Most investors cannot resist the temptation to constantly buy and sell.
• Lethargy, bordering on sloth should remain the cornerstone of an investment style.
• An investor should act as though he had a lifetime decision card with just twenty punches on it.
• Wild swings in share prices have more to do with the "lemming- like" behaviour of institutional investors than with the aggregate returns of the company they own.
• As a group, lemmings have a rotten image, but no individual lemming has ever received bad press.
• Do not take yearly results too seriously. Instead, focus on four or five-year averages.
• It is more important to say "no" to an opportunity, than to say "yes".
• Always invest for the long term.
• Does the business have favourable long term prospects?
• It is not necessary to do extraordinary things to get extraordinary results.
• Remember that the
stock alt market is manic-depressive.
• An investor should ordinarily hold a small piece of an outstanding business with the same tenacity that an owner would exhibit if he owned all of that business.
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