The Dispassionate Investor
From rags to riches. Redemption. An exciting story. A happy ending. These are things that make good movies, not good stocks.
Were you tempted to buy Bank of America, GM, or GE? Or wannabe giant-killer American Micro Devices that had Intel on the ropes for a few shining months?
Human nature can be our worst enemy when we invest. We think a company “deserves” better, is “misunderstood,” is ready to “fight back”… as if the market cares about any of these things.
There are a lot of screaming bargains available right now. Lots of companies with compelling stories. Lots of companies in sexy sectors (like alternative energy). But, you’re not looking for romance. You’re looking for a good investment.
Usually, you can tell a risky stock when you see one. GM never looked good last year. Bank of America made headlines for all the wrong reasons. GE kept revising its earnings down. American Micro Devices is the classic underdog, but had serious money problems it couldn’t hide from anybody.
You know better than to invest in companies like these. Look for your thrills elsewhere – and remember that the biggest investment mistakes are stocks you bought, not the ones you missed.
Andrew Gordon
Andrew Gordon is a former editorial contributor for Early To Rise Investor’s Edition. He has 20 years of experience working in infrastructure and environmental projects around the world. When he wasn't traveling, he taught marketing and finance courses at the state university of Maryland. Mr. Gordon has authored several books for McGraw Hill and other publishing companies on energy markets, global countertrade practices and the hot growth sectors of China and Russia. He is also a top-rated speaker at financial conferences.