Moriarty’s Dozen Rules of Investing

“Markets go up, markets go down. Investors love it when all their stocks go up and like to panic when all their stocks go down. That’s what happens in corrections. We are in a correction. That doesn’t mean panic. It means opportunity.

In my best seller, Basic Investing in Resource Stocks, I literally devoted one entire chapter of the book to what I called Moriarty’s Dozen Rules of Investing. I just went back to the book to see what I said about markets going up and down and the rules were so good that I thought I should throw them in for free.

Chapter 3
Moriarty’s Dozen Rules of Investing

1. All markets are manipulated all of the time by everybody involved. If you can’t handle that, don’t invest.
2. Markets go up, markets go down.
3. Markets tend to overshoot, and when they do, there is often an equal and opposite move.
4. With any investment, buy cheap and sell expensive.
5. Markets deviate from the mean and always regress to the mean.
6. The most dangerous words in investing are “This time it’s different.” It’s never different.
7. Weak hands buy at tops and sell at bottoms. Strong hands buy at bottoms and sell at tops. It’s vital that investors remember that at every top there are 50 reasons to buy, and at every bottom there are 50 reasons to sell. That’s what makes them tops and bottoms.
8. In matters financial, everyone has a bias and an agenda.
9. To make money, figure out what the experts and gurus recommend and then do the opposite. For there are no true experts or gurus; only people who want others to believe they are.
10. In a bull market, pretty much everything goes up regardless of value. In a bear market, pretty much everything goes down no matter the merits of the investment. You need to know which you are in. It’s not rocket science.
11. If you don’t sell at a profit, the only alternative is to sell at a loss.
12. Profitable investing is simple but not easy.”