Wednesday, September 2, 2015

The Stock Market Commandments



**The market and stocks go up AND down, Not up OR down.


**Stocks are nothing but letters and numbers; they don’t know who you are and at what price you own them.

**There is a big difference between a company and its stock!!! Many companies continued to be great companies for months, quarters, years after their stock peaked.  And also vice versa, there are a ton of "bad" companies that have great acting stocks.  Would you rather own a good company or a good stock?

**You don’t know if something is a good buying opportunity until you sell it.  AOL, CSCO, SUNW, MSFT, DELL, YHOO, TANDY, NIFTY 50, were all considered excellent buying opportunities by many.

**If you believe in BEAR RAIDS, then you have to believe in BULL RAIDS.

**It’s never DIFFERENT.

**A good company or a good stock is one that you buy, and it goes higher in which you profit.

**For some, being a long-term investor, just means: I own the stock, its down, and I don’t want to take the loss.

**When the stock you own is down, you already have a loss, you just haven’t  realized it.

**Stocks go up when you have more buyers than sellers.  Stocks go down when you have more sellers than buyers.

**Tops start from 52-week highs when things look great.

**There're a million ways to make money in the market; no right or wrong way if your P&L is positive.

**Never be so quick to say that you will buy a pullback before you get the pullback.  The little friendly high school sweetheart might not be the same girl when she gets back after two years working at Rick’s Cabaret.

**Price targets are foolish, to say I won’t sell a stock until it reaches a certain level is STUPID.  “I will wait until I break even to sell it-(AOL HOLDER)”, “when it gets back to 50 I’ll sell it”-(CSCO HOLDER). Things change, the market environment changes.

**Overbought and oversold are two different animals.  Fading oversold levels works a lot better than fading overbought levels.

**When a stock is going down, don’t blame the shorts, blame the sellers, the shorts have 1/10th of the buying power (selling power) that long funds have.

**Every significant pullback starts as a -“it’s consolidating great”, “buyers are in control”, “it’s just resting”, “it’s an orderly pullback”.

**What the so call Gurus do is more important than what they say or write on some blog.

**Don’t try to make up for all your losses with one trade, you will fail.

**YOU CAN ALWAYS BUY STOCKS BACK.

**Do not let your current positions cloud your judgement, if it is, then go flat (sell it) then analyze it…you will see things differently.

**This game is not about being right or wrong; it’s about making money.  Many rather lose money than admit that they are wrong.

fzorrilla@zorcapital.com   @Zortrades

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