Along the lines of our earlier post is this nice round up of investing/trading errors via Glenn Curtis:
Ignorance may be bliss, but not knowing why your stocks are failing and money is disappearing from your pockets is a long way from paradise:
1. Ignoring Catalysts
2. Catching the Falling Knife
3. Failing to Consider Macroeconomic Variables
4. Forgetting About Dilution
5. Not Recognizing Seasonal Fluctuations
6. Missing Sector Trends
7. Avoiding Technical Trends
Glenn goes into details on each of these in the full article.
Source:
Seven Forehead-Slapping Stock Blunders
Glenn Curtis
http://www.investopedia.com/articles/basics/08/blunders.asp?partner=forbes-am
8. Participating in this market.
8. Participating in this market.
8. Participating in this market.
8. Participating in this market.
9. Watching CNBC with the sound on.
10. Assuming you are on a level playing field.
11. Belief that you are operating in “free markets”.
12a. Setting stops to tight and losing a swing thereby
12b. Setting stops to loose and getting reamed on a reversal
13. Misspelling “too”
14. Looking for trading tips in the comments section.
15. An MBA has been put in charge of the firm / government entity.
16. believing your own bullshit
17. Thinking if I don’t get in now, I will miss most of the upside.
18. Thinking since I have already lost so much money, that getting out now won’t accomplish much.
19. Following my brain instead of my gut.
20. Understanding that it is not just the other guy who can be greedy, I can be that guy too. And almost always, that winds up painful.
Bruce in Tennessee
21. Monkey see, monkey do. Believing the technical analysis scam is actually a valid trading strategy. Warren Buffett did it so it must work. Oops. Warren Buffett didn’t do it. Did any rich guy do it? no? Oh, nevermind.
#1 – Watching too much CNBC, especially, Dudlow and Company.
Econolicious
I think I just broke most of those rules. I decided to pick up a basket of 8 beaten down stocks and see where I end up. The worse of them is down 98%.
An exercise in catching falling knives…