Golden Rules

Golden Rules extracted from Peter Lynch:

1. Investing is fun, exciting and dangerous if you don't do any work.
2. You can outperform the experts if you use your edge by investing in companies or industries you already understand
3. Behind every stock is a company
4. You have to know what you own, and why you own it
5. Never invest in a company without understanding its finances
6. Average person can concentrate on a few good companies. It only takes a handful of big winners to make a lifetime of investing worthwhile
7. Sell a stock because the company's fundamental deteriorate
8. If you can't find any companies that you think are attractive, put your money in the bank until you discover some

Check up:

Two basic Questions

1. Is the stock still attractive priced relative to earnings?
2. What is happening in the company to make the earnings go up?

Conclusions

1. The story has gotten better -> Increase holding
2. The story has gotten worse -> Decrease holding
3. The story is unchanged -> Stick with the investment or find another company with more exciting prospects.