RE: Rumor millYour 3 simple rules are, quite frankly, only going to lead a neophyte into trouble.
1) Ignoring bashers is, as many have found out here, ill advised. Some actually give up good information or can tip you to a coming attack on your investment.
2) The company may have a game plan but you should always question is that plan viable given the human and capital resources they possess. Look to their peers and see what they're doing differently and the strength of their relative value proposition
3) I agree with DD, but emotions (greed or fear) should never enter into you investment decisions period.
Here's mine.
1. Believe in and invest in only what you can personally verify (on that we agree). The rest is speculative, and with speculation comes risk.
2. It is a lot harder to make money in the stock market than it is to lose it. Keep that in mind always and take profits. You cannot lose money riding free shares. Although a 100% loss is uncommon, invest only what you can afford to lose.
3. Never take a significant position in a company who's business that you don't understand.
4. EVERYBODY is here to make money. As a retail investor, you are at a disadvantage. Learn how nimbleness can work for profit and also learn how those with capital can steamroll you into the ground.
You may also wish to look for some educational material put together by others.
- The "anatomy of a pump and dump video on youtube. It explains how that type of play works and how to spot them.
- There are multiple essays on how to spot a basher. Search out the ones on how to spot a pumper as well.
- I don't have the link but there was a pretty decent podcast posted here on manipulation tactics. You can understand them, spot them when they are occurring, but unless you have access to equal or greater capital you cannot beat them. It is easier to either wait it out or swim with the tide than it is to swim against it.
Finally, be patient while you are learning. Those that swing for the fences strike out far more often than they put one out of the park. Everyone thinks that striking out only happens to "somebody else". Somebody has to be that somebody else, don't let it be you.
With experience, you will learn to spot companies with true promise and if they are undervalued. Spec can be fun, but it's no different than gambling. Sometimes you'll win, sometimes you'll lose. Try to keep balance in your portfolio.
Good luck all.