1/ The best investment in the world is the risk free investment. This comes by taking enough profits in a
company to take out your costs. Then you can keep it forever if you want. I call this playing with the
house's money.
company to take out your costs. Then you can keep it forever if you want. I call this playing with the
house's money.
2/ I get that question the most of any question I get from investors. It goes like this, “I bought XYZ company and it's up 300%, should I keep it or sell it?” My answer is always the same. I tell them to sell at least enough to take out their costs.
3/ Then they can let the rest run as long as they like
the company. This allows us to take out our cost when things are bubbly so we don't lose money during
the bust period.
the company. This allows us to take out our cost when things are bubbly so we don't lose money during
the bust period.
4/ The one thing you can count on in biotech is there will be setbacks and struggles for every early stage company. Taking out your cost reduces your risk to zero.
5/ I tend to use a system of trading around my position to pay off my cost a little at a time. Once I reduce my cost basis to zero from capital gains, I can hold my shares at no risk to me.
6/ The biggest risk I have ever found in the markets is emotion. Things like fear and greed compel
investors to do all the wrong things for all the wrong reasons and at the very worst time.
investors to do all the wrong things for all the wrong reasons and at the very worst time.
7/ Things like buying an exciting new biotech at the peak of euphoria right before it crashes back to reality. Fear will compel investors to sell a great company just because the stock is going lower right before a big buyout.
8/ The first thing a successful investor learns to do is to control their emotions with strategy and discipline.
9/ I find my emotions actually work the opposite of most other investors. When stocks are screaming
higher, I get scared as I know those profits will be erased on the next correction.
higher, I get scared as I know those profits will be erased on the next correction.
10/ When stocks are crashing, I am like a kid in the candy store. I get excited by a good sell off. I love buying things that I like when they are cheap.
11/ Emotion has ruined many investors in my 25 years. Strategy and Discipline are the virtues of the investors who not only survive but thrive over the long term.
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