| All offense and no defense seldom wins the game. | | | | right fibril for his electric lamp. |
| Indeed, a strong defense is the best offense. In the | | | | Out of your ten stocks, most likely, only one or two |
| game of investing, unless you know how to protect | | | | may turn out to be salient and profitable. For the |
| yourself against losses, you can't win big. Once | | | | remaining eight, wait and hope. When the drop in |
| caught up in a big venture, know when to sell your | | | | price reaches the maximum limit, sell them. Keep |
| stocks and cut losses. | | | | trying until you make it big. Microsoft only made it big |
| Mistakes are common even to the most successful | | | | in 1986-1992; International Game Technology in |
| investors. No matter how sound is your analysis, you'll | | | | 1991-1993; Cisco Systems in 1995-2000, all with |
| probably right not most of the time. It takes discipline | | | | dazzling gains ranging from 100% to over 1000% (W. |
| and a lot of courage to accept mistakes, | | | | J. O'Neil, How to Make Money in Stocks). |
| nevertheless, learn to cut short and limit losses. | | | | What you hope or want, the stocks couldn't care |
| You've got to recognize when you may be wrong | | | | less. You don't want to take a loss, so you can't sell |
| and don't hesitate to sell your stocks. | | | | your stocks even if the price is dropping below your |
| How can you tell when you may be wrong? When | | | | invested capital. You already incurred the loss. |
| the price of the stocks falls below the price you paid | | | | Whether you hold on to or sell them won't change |
| for it by maximum of 7% or 8%, then you will know | | | | the value of your stock. If the price you paid for is |
| that the chances of being wrong and the price you'll | | | | $50 per share, for 1,000 shares, and the price drops |
| pay for being wrong will most probably increase. It is | | | | to $25 per share, you already incurred a loss of |
| important then to set a limit on loss to initial invested | | | | $25,000. It is still worth $25,000. Keep it and wait for |
| capital. | | | | the price to rise? Think more objectively! Sell your |
| Success is not a product of luck but hard work. | | | | stocks and buy other stocks and you will be better |
| Success is not overnight. Of course you know Manny | | | | off taking the chance to recuperate from your |
| Pacquiao. From humble beginning he rose to the top | | | | losses. There are many other stocks to choose from. |
| due to patience and hard work. The Beatles were | | | | Seldom, investors are able to think logically when |
| turned down by many recording companies in England | | | | confronted with such failure. They rationalize that the |
| before they made it big. When I was in high school, | | | | fall in price won't go any lower thus, continuously |
| my English was very poor, now I can write articles. | | | | holding on to their stocks, anxious that selling at a |
| Einstein failed in math. The late former Philippine | | | | loss could readily strip them off of their luxury |
| President Ferdinand E. Marcos, who was then | | | | bedding ensembles, a duvet and a sound sleep. As a |
| regarded as the strongest man in Asia, failed in | | | | result they incur more and more losses than they |
| Political Science. Substantial gain in stocks takes a lot | | | | have expected until one day they will find |
| of trial and error. Thomas Edison tried on thousands | | | | themselves waking up on the floor without even a |
| of diverse materials from 6,000 samples of bamboo | | | | bed. |
| to chicken plumes before he was able to get the | | | | |