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Hi Marc,

Heihojin has superbly summarized the crucial tenets of what constitutes the Foolish way to approach investment: do your homework, think long-term (more on this below), ask questions, be your best advocate. I would like to add a few musings of my own (this IS Christmas time after all ;-D )

If you don't want to venture too far away from your confort zone while beating the market, start by researching and invest in what you already know. Sure enough, biotech, Internet, wireless, and networking are the sectors to be for the years to come, but remember that in most sectors of the economy, there are excellent public companies that truly dominate their field, AND provide superior returns to their shareholders.

About long term: this must be the toughest tenet of all to observe faithfully. I challenge anyone in Fooldom and elsewhere to deny never having temptations to "make it quick" or jump into the hottest tip of the day. Or even worse, dumping the rationale of due diligence in pursuit of a stock chimera, be it for impatience, fear, doubt, most likely sparked by hearsay, pseudo logic, or articles in the financial press.

For instance, there is a first page article in Barron's "What's wrong Warren?" asking the most succesful investor in modern history why is it he can't beat the market [this year]. Eeek! Time to dump this dog! Wealth Hazard! Contaminated stock! Ruuun!

Well! guess what? In the last 22 years, Buffet was below market four times.

Geez! Sucks Right? Hmmm! Did I mention "long term"? During these same 22 years, compounded annual growth return for Berkshire Hathaway (Buffet's investment holding) was about 24.3% (if memory serves me well). And the gentleman is (by own admission) techno-challenged. No high-tech terabyte-router, or gene sequencer, or cardiomyocyte pyruvate dehydrogenase stimulation (no kidding!) in his portfolio. But results? Yes! Over loooong tem? Yes! The financial press has a 20 years perspective? NO! Do you? Yes!
Then, you'll be succesful in investing.

Happy New Year

My 2 n'gwees
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