Market Lessons Learned

By on April 19, 2010

Eddy Elfenbein of Crossing Wall Street recently published a long list of things about the markets he’s learned over the years. Following are the most interesting (or original) in my opinion:

Investment bubbles aren’t due to the moral failings of the market participants.

Ignore anyone who tells you that the Federal Reserve is a private bank.

Commodities are almost always terrible investments.

As a general rule, IPOs are a bad deal.

Boring but profitable always beats exciting and unprofitable.

No one can consistently time the market. No one.

The data showing a return premium for small-cap stocks is probably wrong.

Follow unfollowed stocks.

The market isn’t efficient—it can be beaten. But it’s very, very, very, very hard.

Most technical analysis is complete garbage.

A high P/E Ratio is much better sign of a stock to sell than a low P/E Ratio is a sign to buy.

Many gold bugs are quite simply fanatics.

Never base an investment decision of demographics.

Never stress out about what a stock does after you sell it.

Source: Crosssing Wall Street
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