STREET DOGS

Afew reminders: No-one, absolutely noone, knows everything.

Professional investors and fund managers work full-time on their portfolios, have access to management teams and subscribe to great data and financial services, but the market is still bigger than them and very smart managers can still make very big mistakes. Defensive sectors can still

decline. Preferred shares and utility stocks can also produce truly horrible performances. When markets shift, even so-called safe stocks can still take a big hit.

Don’t “buy the news”. A lot of investors trade around news events. They buy hoping for an earnings announcement, contract win or some other corporate event. All too often, though, when it happens (pretty seldom as it turns out) they still end up asking: “So why is the stock down?” Takeover rumours are a dime a dozen. Sure, maybe two or three of the rumours will come true over the years, but most won’t.

Don’t rely on past performance. Investors have a tendency to fight the last war rather than prepare for the next.

Don’t ignore a stock forever.

Many investors, once burned on a stock, refuse to look at that company again. Ignoring any name reduces your potential investable universe. Things change, markets are dynamic. Do not limit your investment options with a bad attitude towards a former loser. Don’t fall in love with a stock.

Settle for a brief affair. Stay with them only for as long as they are going up. Having said that… Don’t look at the minor moves.

You can’t say “I’m in it for the long run” and then keep checking the market prices every two seconds.

Learn to be patient. As in other aspects of life, the need for instant gratification seldom turns out to be a good thing in investing.