Vital information (The Financial Athlete #99)

In Motocross a biker must intimately know the terrain…every ramp, sharp angled turn, bump and dip.  All of this is vital information while traveling at a high speed.

An investor of individual stocks who ignores vital information places herself in peril, like the motocross biker who falls off the bike for lack of knowledge of the terrain.

Glean vital information from financial statements and press releases and conference calls, but do not stop there. Be investigative. Research the industry, and speak to management or investor relations periodically. While this adds work into investing, it also makes it far more interesting.

Discuss the situation with other analytical investors. Beware of over-enthusiastic investors who are  in the habit of hearing what they want to hear and seeing what they want to see. Although they may mean well and believe they have discovered vital information, these people are easily led astray by manipulators.

Be guided by reason, not wishful thinking or hunches or rumors. Reason is the best tool used to distinguish between vital information from non-vital information. Avoid drawing conclusions far beyond given information. Question the veracity of the premises. All definitive conclusions must logically follow true premises.


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