New Column up at Real Money (01/02/08)

RealMoney My year end review of the lessons provided by 2007 is now up at Real Money.

The details are at the subscription only site, but here are the bullet points:

• Ignore market rumors
• Buy sector strength (Corollary: avoid weak sectors): 
• Never blindly follow the “Big Money”  (a/k/a Professionals make dumb mistakes also):
• Day-to-day stock action is noise
• P/E matters less than you think
• Ignore deteriorating fundamentals at your peril
• Nothing is more costly than chasing yield
• Know what you own
• Simple is better than complex
• Stick to what you do best
• Fess up!
• Risk management matters
• The Trend is still your friend

Its on the subscription only site, but I will try to get it moved to the free section tomorrow . . .



Lessons From 2007: A Baker’s Dozen
Barry Ritholtz, 1/2/2008 6:54 AM EST

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What's been said:

Discussions found on the web:
  1. Sean commented on Jan 2

    A sneeze at USA caused Economy Contraction at Singapore!!

    Singapore quarterly GDP contracts 3.2%!!

    Funny that their stock market is still close to all time high. Maybe they have learned a page from Bernanke + Paulson to “inject” their market, and ABOLISH stock market contraction.

    By the way I can assure you 110% that Singapore is a country that would consider pooh of USA tasty, i.e. they are dogs of USA.

  2. Marcus Aurelius commented on Jan 2

    • Ignore deteriorating fundamentals at your peril


    This is where the rubber hits the road. The fundamentals of most of our economy are unsound. Like I said a few days ago: Gold, guns, and farmland. Solid fundamentals.

  3. Dan commented on Jan 2

    How in the world can they come up with an accurate figure for 4th Qtr GDP when it ended less than 2 days ago?
    If they are that good we should fire the BLS and outsource the job to Singapore.
    Maybe it is just a WAG.

  4. Marcus Aurelius commented on Jan 2

    Gold, gold, gold!

    A new all-time high!

    Time to buy the guns and some relatively cheap foreign farm land.

    I’m going to name my farm “GTFO Farm”.

  5. Francois commented on Jan 2

    “Buy sector strength (Corollary: avoid weak sectors)”

    Don’t weak sectors make good shorts?
    Or at least, good buy for puts?

    Trend is my friend on the way up and on the way down too. Or am I missing something…again? ;-)

  6. Mike G. commented on Jan 2

    FINALLY! Someone who shares my view on yield (I think, I have only seen the bullet).

    I can’t tell you how much I cringe when I see someone commenting on “being paid to wait”. Every time I see this it is for a stock that is off 5% on its way to being off 20% and I’m thinking, “that 2% yield doesn’t mean squat to me when the stock goes down 20%. Sure, the yield will be recalculated to 8% for the guy that buys the stock after the correction, but that ain’t you if you bought it earlier!”

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