When To Buy and When Not To Sell - Part 2

In the first part of this series, I had shared some 'life experiences' of friends and family who have attempted 'success on the stock markets'. I'll re-use these experiences to share the Do's and Don'ts I have learnt, practiced and continue to improve on.

Here are some of my general views about the markets:

Don't follow opinions of analysts on business news channels.
- If they were so good, they would not be on TV. They would have been making money themselves.
- Most of them do not bet their money on the stocks they advise.
- Good news about stocks you have bought only confirms your bias about your stock. Bad news about the same stock does not help you make a decision to sell.
- Business newspapers will always have more BUY recommendations that SELL or HOLD. The reasons are:

• Get you to enter the trade; once you have bought, then only SELL or HOLD recommendations become applicable

• There are higher chances that you don't own the stock. If you already owned the stock, then a BUY recommendation confirms your bias about your stock pick

- BUY, STRONG BUY, ACCUMULATE are irrelevant in the context of buying a stock.
- Similarly, SELL, STRONG SELL, REDUCE is equally irrelevant when selling a stock.

- Most irrelevant is NEUTRAL, HOLD. Does it mean our educated analysts do not know what to do?