Thursday, August 12, 2010

Discover the Upside of Down

Title: Discover the Upside of Down
Author: Ron Coby
Publisher: John Wiley & Sons, Inc

Basically this is a book written by a hedge fund manager to share with the readers of his vast investment experience, as well as his view on the market in the next years. 

He also shares with the readers his 10 Iron Law of Investing:

1. When the Fed is raising interest rates, investors need to be raising cash
2. When there is fear and market despair everywhere, buy like there is no tomorrow
3. Never average down in "cheap" stocks, as cheap gets cheaper and hope kills
4. Have a set of timing indicators to help you buy low and sell high and always be hedged for downside protection
5. Cut your losses short so you never ride a stock all the way to zero
6. Always diversify with large and small common stocks, long and short
7. Don't completely trust anyone's word on the street, as Wall Street is crawling with snakes and crooks
8. When the DJUA falls into a Stage 4 Decline, sell all bonds and start selling stocks short.  If you don't feel comfortable shorting stocks, then cut back severely on long positions and raise cash
9. Never break any of your investment rules
10. Never put more than 10 percent of your portfolio in any one stock pick, and no more than 25 percent of your total portfolio in micro-cap stocks

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