Remember the post I made about Shopper's Disease? Here's the followup. I'm posting this reader's letter because I think a lot of you have been doing the same thing: thinking about doing this like a disciplined Rule #1 investor but behaving like a trader, gambling your money on businesses you haven't researched or don't understand. Remember the most important part of Rule #1: Don't lose money! This means staying in cash until something on your Watch List is available at the Margin of Safety. And buying one thing at a time (unless you have a lot of money to invest).
Good evening, Phil Town
You didn't go wrong at all and I will start following RULE #1. I just got caught up in the game and it's hard not to at first without someone monitoring every single move and helping me along. Also, Cramer gets me all wound up and a lot of the stocks I got into at the begininng were one's he recommended. He is great and if I wouldn't have paniced when they started going down just a little I would be ahead so it's my own fault. I don't react to 'Mad Money' the way I used to. I still watch it but I don't sit with my laptop on the couch and type in every single stock on Investtools as he mentions them. I can watch it while I'm on the treadmill and "maybe" look at the summary the next day if I want to read about something he talked about. A much calmer feeling!! I only check Scottrade about once a day now. I was checking it about every 10 minutes and it was driving me nuts. I always felt like I had to do something but that's not the case and I don't feel that way any more.
I am paying for Investtools but not utilizing it the way I should ($600 per year so add that to my trades and I'm down a bunch!!). I am confident I got a lot out of my system these last few months and I hope to get myself on the right track. I would like to let GOOG and YHOO go back up a little before I get out of them and possibly ASVI as well. In the meantime, I will concentrate on finding ONE company that I like and understand and invest my funds in that ONE business. I get it now but I fell into the trap in the beginning. I NEED YOUR BOOK so you're here with me to remind me about RULE #1 and to not do stupid stuff in the future! 2 months.
Take care Phil Town and thank you for your time.
Phil Town is an investment advisor, hedge fund manager, 3x NY Times Best-Selling Author, ex-Grand Canyon river guide, and former Lieutenant in the US Army Special Forces. He and his wife, Melissa, share a passion for horses, polo, and eventing. Phil’s goal is to help you learn how to invest and achieve financial independence.