Lessons in Stock Investment

1. Don't eat your shit - sometimes, it might seem like a company making profit is a very good sign for the stock price to go up, but it doesnt. (Examples, INTC stock plummeted even after doubling the profit margin). Curb the enthusiasm and play it carefully.
2. Dont be penny greedy, and dollar loser. When buying, look for how much you are gonna lose with a limit order that is may be ten cents lesser than the current market price. But then the stock begins to rise, the order never goes through, and you might have proved yourself to be the biggest fool for losing hundreds of dollars for may be 10 dollars.
3. Penny stocks are very dangerous. It is the closest thing to gambling. You might think that your investment is very less, but chances of the stock bottoming to zero is much higher than chances of the stock bouncing back. Avoid penny stocks at all costs.
4. Make long term investments as part of your portfolio. Think of the long term potential of the company you are investing.
5. Take into account the dividend the company pays every year. Chances are that even though the stock doesnt appreciate, you might be making more money than you could with a stock that doesnt feed you with dividends.
6. Know the company you are investing in. Dont just go in for the market enthusiasm, if you do, be very careful in understanding when the company is going to take the turn for worse.
7. Big investment, big risks, big rewards. Small investments, small risks, small rewards. Might sound very simple, but many people dont remember it.
8. Never buy on margin unless you are capable of letting go of the money and also are capable of repaying the full loan within your capacity.
9. Spread your eggs across nests - have MF investments as part of your overall investments. This is a time tested philosophy for making money without risking much.
10. Beware of Uncle Sam - dont spend all your profits, for, you need money to pay capital gains tax on Apr 15.