Common mistakes of Investors

Two utmost important rules:

A stock which keeps rising is a good stock no matter how bad it seems fundamentally.

A stock which keeps falling is a bad stock no matter how good it seems fundamentally.
 
Quote from xxxskier:

trading or investing?

however, on the most basic level of strategy and execution, the most common mistake, imo, is that a buyer fails to consider whether other buyers (with enough money) will come in AFTER him and be willing to buy at subsequently higher prices to keep price moving in their direction.......and if you're getting short the mistake is not considering whether others with size wiil be willing to sell at lower prices AFTER you do.
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I thought I would bump this up again just to say that I also agree with xxxskier... He said it fairly well. Gotta be early and have more coming to the party after you get in. I base my views on what I've learned since I started trading and investing about 44 years ago. ag
 
Quote from Benign:

A stock which keeps rising is a good stock no matter how bad it seems fundamentally.
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This is a great rule for traders, but not so much for long term investors. A stock that keeps rising even though fundamentally it's wearing the Emperor's New Clothes, will eventually be brought down to earth.

Some examples are HOTT (5/7/09, after rising nearly 200% over 6 months to a ridiculous P/E on the success spawned by a single movie), STEC (9/17/09, following a 7-month gain of almost 1100% based on continuing sales to one large customer and a belief that somehow they'd never have competitors), and GAP (1/12/10, after rising nearly 270% over 6 months despite a complete inability to generate a profit of any kind for 6 quarters in a row and massive future loss projections).
 
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