Verification and Explanation of the 49 Rules of the Stock Market
1. Do your research before investing; avoid hindsight bias
It is crucial to conduct thorough research before making an investment decision. Avoid basing your investments on rumors or insider gossip. Often, this essential step of proper research is not fully appreciated by many investors, even institutional ones. Especially during market downturns, much attention seems to be focused on the day's market movements, which can sometimes lead to panic selling.
2. Stocks with low share prices tend to double easily
Stocks that have lower price points often have more potential to increase significantly in value compared to those that are already trading at higher prices. This rule suggests that investors may find greater opportunities for returns when considering undervalued stocks. However, it’s important to remember that while lower-priced stocks can offer high upside potential, they also come with increased risks and volatility.