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Author: AlchemyUK One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 6326  
Subject: Money Management is Everything Date: 5/22/2001 1:26 PM
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copied from Larry Holmes of www.cashflowresources.com

"You know, I started my financial career as a young lad
on Wall Street about 27 years ago.

During that time, I've observed literally thousands of
investors. Most of them have been pretty bad. Some have
been OK. And a precious few have been great.

The great investors (traders, speculators, whatever)
have had very different styles.

Many have been long term, buy and hold types. Others
have been more intermediate term traders. I've also
known day traders and swing traders.

They've also varied in terms of their investments -
stocks, bonds, futures, real estate, precious metals -
you name it.

Not only that, they've varied in terms of their
analysis. Many have relied on fundamental analysis.
Many have been pure chart readers. Others have been a
blend of both.

But the great ones have one thing in common - they
understand that money management is everything.

Warren Buffett and William J. O'Neill are very
different investors. They take an entirely different
approach and end up investing in very different stocks.
But they're both great.

However, they totally agree on what's most important.
Warren Buffett says the #1 rule in investing is "Don't
lose money." William O'Neill say the #1 rule in
investing is to "protect your investment account".

For example, I recently bought three stocks -
Occidental Petroleum, Cabot Oil & Gas Corp., and LNR
Property Corp. Will I make money in those stocks? I
don't know. And I honestly don't care. I do know that
the odds in my favor.

But if I don't make money in those particular stocks, I
know my assets will still grow. Why? Because I have a
plan. I have a strict entry and exit strategy. I'll
just get out of those stocks, protect my account by
taking a small loss, and move on the next one where the
odds are in my favor.

So, in the long run, I can't lose as long as I'm a good
money manager."


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