Gerald Loeb’s Rules

4 Feb 2017

"Concentration of investments in a minimum of stocks ensures that enough time will be given to the choice of each so that every important detail about them will be known."

 

Concentrate on your best investment

 

"Diversification is a necessity for the beginner. On the other hand, the really great fortunes were made by concentration. The greater your experience, the greater your capability for running risks, and the greater your ability to chart your course yourself, the less you need to diversify.”

 

Take profits often, lock in gains frequently

 

"Many 'long-pull' traders ignore a sign of a change of trend because they feel it is temporary. Often they are right, but eventually they are wrong, and usually at great cost. The short-term method requires the closing of the trade for a reason, and if later the situation changes, then one can re-establish the position,”

 

A stock can plunge even if the market is doing fine

 

Even within a single industry, performance among companies can vary greatly

 

Build your position as a stock rises in price, not falls

 

"I believe in pyramiding, not averaging,"

 

 

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