Everyone will give you advice. Most of it is worth crap. You need to make your own investment decisions. It’s your money, and believe me, no one cares if you lose it. In fact, many are rooting for you to.

2) Never blindly trust information.

Investing isn’t a cult. You need to independently confirm every thing you hear about a stock or a company. People will lie, because they stand to make a ton of money from stock sales. They’ll gladly mis-represent information, so insist on looking at the real thing.

3) Do the work and understand what you’re buying.

Stock investing a fairly complex topic. It could take you many months or even years to master the basics. Mastering the basics is what you need to be concerned with. If you really thing there’s a fast buck coming your way, you need to wise up.

4) Develop a trading style or system.

Make up a system that works for you. Be unique and don’t base all the ideas on other people’s systems. Every single system has a weakness, or all traders would get rich. But the point is to craft an original investing method that works for your personality.

5) Ignore “hot stock tips”.

Most hot stock tips are cooler than Alaska in January. If they were as hot as Shakira, then they would be implemented by the person who has them. The only information about investing that’s released to the masses is outdated.

6) Most people who recommend stocks do so because they have a financial inducement.

Don’t kid yourself about recommendations. They’re rarely done for free. Be aware that if you purchase a stock at one price, the chances are it was recommended after being purchased for a lower one.

7) Concentrate on one sector.

You won’t be able to learn about every company or stocks. You’re better off being intimately familiar with only a handful of stocks.

You need to put big money to see big profits.

Don’t delude yourself about quitting your day job on $5k of capital. It’s not that much money, sparky. You need a major bankroll to make decent money.

9) Don’t overdiversify or put too much money into too many stocks.

If you do, you can expect to have a hard time getting returns. If you start with a small amount of cash, you need to concentrate in one stock to have the best result.

10) Use stop losses.

Don’t ever lose more than ten percent on any trade. If you use a stop-loss, you can guarantee that your downside is never less than 10%. This could save you in the event of a freefall.

Even a company that’s doing a great job doesn’t always get the top valuation the managers expect. Despite the best efforts of all involved, the stock price might languish for a variety of reasons. Holding on to the stock just because you’re “sure” the company is doing well is not enough of a reason.

You have to examine the big picture when it comes to stock, not just the pleasurable parts. And if other people don’t agree with your valuation of a stock, that’s okay, as long as you have a ton of patience. If not, you’re forced to hang on with nothing but belief. And belief almost always turns to terror when the bottom falls out.

Either way you look at it, stop-losses are the only safe way to hold most stocks. Most people know it, but not everyone thinks it’s a key to success. If you’re in love with a stock, make sure to set an extra tight stop.

Sure, it’s great to get opinions from the masses. It always pay to get a genuine feel for the sentiments of folks towards companies or stock prices, but if you try to blindly follow what someone else does, you’ll end up in a world of hurt. Some people online have their own agendas, and that agenda might be the counter opposite of what you need. That means you need to take care of Number One first and foremost, and make sure that any deal you plan on entering into, you understand fully.

Be aware of the possibility that info you’re getting is not accurate, and don’t forget to investigate it on your own. Stocks are complicated in one way, but easy in another. The companies you buy stock in are real. You can always try purchasing the companies products or calling their investor relations department. They make money by talking to the public, so always give them a call if you’re suspicious of any info.

1) They described the stock market as a bi-polar character named “Mr Market”. Mr. Market always swings from extreme highs to lows, and depending on his mood will offer your prices on your shares which are way high or way low.

2) Despite Mr. Market’s mercurial nature, at the very basis of any stock is an intrinsic economic value which can be determined. To them, Value and Price are not the same thing on any given day, and therein lies the secret to successful trading.

3) The best way to make money is to buy a stock when Mr. Market is extremely manicly depressed and sells to you for a very low price. This usually happens around the time of scandals or negative economic news, which tend to cause knee-jerk reactions which generally lower prices. You sell the stock again when the share prices have reached or exceeded their intrinsic value, and Mr. Market is feeling overly upbeat.

The strategy is simple in theory, but complex in practice. Some of the most successful investors of all time have used value investing principles (Bill Miller, Warren Buffett, the late Bill Ruane). We’ll look into the discipline in more detail in future posts.

If you’re very lucky, you just may find the next 10,000% gainer, before the company makes its’ meteoric rise.

Companies that might be of interest due to high sales and earnings growth:

• Chico’s – merely the greatest retailer going – and a record 8 appearances on the list – chec out this company if you have any sense, because they just had a rare correction
• Coldwater Creek – another up and coming high end retailer
• UnderArmour – expensive undershirts keep the coming flying high since its’ IPO
• Build-a-Bear – a funny concept, but one that just rakes in the cash

Burgeoning profits normally mean higher share prices for investors, so any of these stocks you can pick up at bargain prices is well worth a look. Make sure to do your due dilligence, but many fast growing companies have a way of really rewarding patient investors. In fact, a company that you hold from the time their a micro-cap to the time their a large-cap might just make you wealthy. Look for the acorns that grow to become mighty trees.

You can’t miss some of these opinion makers:

• TheStreet.com – the famous Jim Cramer gives his opinions on stock. You can always get a sense of
• Yahoo Finance – The Grand-daddy of them all. You can find tools here for everything you need
• Google Finance – Google’s version of Yahoo Finance with slightly different tools

Don’t forget, the best tools are in your trading account.

You need to make sure to do some research, and most of it can be done from filings. Yahoo or Google always have convenient links to Oscar filings, so make sure to check them out so you can really crunch the numbers. The Standard & Poor’s research tools available in most online brokerage accounts is very useful as well. Do you know of any other helpful tools?

You don’t want to fight the trend, and up swimming against the stream. The best way to invest is with a smooth tailwind pushing you gradually up. Sure, an explosive move upward can be great when it happens, but chances are you’re looking at smaller returns when the overall stock market starts lurching sidewards.

Where is all the investing profit? Smart money moves faster than ever before. The stock market competes with many, many other financial instruments, which are getting more popular all the time. You can invest your money more easily these days into a dizzying array of products, so you don’t NEED to invest in stocks. Right now people are:

• 1) Investing in real estate in record proportions
• 2) Are more involved in commodities than ever before
• 3) Put money into hedge funds which do not rely on stocks for big returns

Any or all of these may be options for you, depending on your investment goals. Don’t be afraid to examine all alternatives before committing your money to one class of investment. There’s no need to use tunnel vision to achieve high returns. Cash is looking like a great place to be right now for the majority of patient investors.

Adding to this is the fact that the Federal Reserve raised the interest rate, and probably will do so several more times before year end. Overheated stocks are slowing down rapidly as summer approaches.

If you’re looking to buy stocks soon, you need to consider just how these economic factors will figure into your investment. Prices are going up. Inflation is kicking in. Oil is at a record high. All signs point to skittish consumers. Business will go on, as always, but it’s time to err on the side of caution, especially if you’re dabbling with stocks that have already ran up. Check the charts before plunging in, and make sure to set a tight stop, because this could continue for awhile.

Although Pink Sheets sells most of these stocks, they have some pretty significant warnings about their purchase. One of the most telling examples of the risk is:

An investment in an OTC security is speculative and involves a high degree of risk. Many OTC securities are relatively illiquid, or “thinly traded,” which tends to increase price volatility. Illiquid securities are often difficult for investors to buy or sell without dramatically affecting the quoted price. In some cases, the liquidation of a position in an OTC security may not be possible within a reasonable period of time.

Basically, when a few people buy a penny stock, the stock price goes up accordingly. For this reason, penny stocks are custom made for fraudsters who operate online. They generally search for clueless newbie investors who don’t much about the technical aspects of trading, and they sell them on the idea of buying stock. The people pumping the stocks are the ones who gain when a sucker buys.

The number of rogues penny stock websites is growing. One of the most common tricks for penny stock pumpers to use is to hype these irregular companies and stocks wherever they can find a free place to spam. Ignore all of it. When you see a stock that is selling for 1/10th of 1 CENT, you better believe you get what you pay for. It’s that “cheap” for a damn good reason. Steer clear.

Dell has been struggling with slowing growth as competition has increased from rivals Hewlett-Packard Co., whose shares shed 2.3 percent in after hours trade, and Asian competitors such as Lenovo Group Ltd. and Acer Computer International.

For a long while, Dell defeated competitors by keeping their operating expenses low and marketing directly. Others have followed suit and imitated, eroding their unique advantage. In fact, Lenovo and Acer can build units cheaper, and have vastly improved their marketing ability. This serves as a reminder of a how quickly things can change.

Yesterday’s stock market leaders rarely lead in new rallies. In fact, take a look at almost any of the darlings of the tech boom in the late 1990s, and you’ll see they’re shadows of their former selves, both operationally, and from a stock standpoint. For this reason, we should never become so enamored of a stock or company, that we fail to see how drastically changing conditions could effect them. Dell is in a long way from being in real trouble, and they’re still an excellent company, but there’s no idea on just how quickly they can grow again. And much of the high stock price they earned in the 1990s was based on the inflated and unrealistic expectations of growth people had for Dell. Now we can see that some of the dreams are deflated. For this reason, prune your portfolio of any high flyers who have severely cooled off because of changes in their operating environment.