The Baruch Question

I dabble in the stock market a little. I am not as successful as I would like to be, but I don’t play with too much because it is a field that I don’t profess to be an expert.

I read a great short story the other day about a man called Bernard Baruch. Bernard, a billionare investor by today’s standards, had a philosophy. Reading about it gave me a wow moment. What great Questions. It will help you make some decisions about your portfolio a lot simpler. You may own shares that you don’t sell because you paid a lot more than what they are worth and you don’t want to realize the loss, or you think that maybe they will come back in value. I have a couple of stocks like that and the chances of them making a profit for me are very slim. I think it is time I asked some of these questions…

The Baruch Question

Bernard Baruch was one of the most successful stock investor of all time. He was always one step ahead and foresaw the stock market crash of 1929, sold his stock at peak price and made huge profits during the great depression. He died a very rich man.

The secret of his success was:

Every morning he would check to see what his stocks were selling for. Then he would then ask himself:

a. “Would I buy this stock today?” If the answer were “yes,” he would hold on to the stock. In some cases he would buy more. If the answer was “no,” then he would sell it.

b. He did not ask, “what did I pay for this stock?” or “how long have I held it?”

c. He did not ask, “Can I justify a loss?”

d. He asked, “If I didn’t own this stock would it be a good investment today?”

e. He asked himself, “Would I buy it now for the first time?”

To me they were very intelligent questions and questions that led him to great success.

Source: Secrets Of Libertarian Persuasion

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