Amazon.com: Rule #1: The Simple Strategy for Successful Investing in Only 15 Minutes a Week!: Phil Town: Books
A friend wrote me saying that he finally finished reading Rule #1 by Phil Town. He asked how its going for me 2 years later?

My reply.....

It worked out really well for me. I did 36% in my first year using MSN money to research and track my portfolio. Not wanting to confuse brains with a bull market, things overall were running up right up to Nov 2007 when the credit crash happened. I was in at a good overall time. I knew it was coming and got out in Sept. I missed two great months of gains, but I was sitting in cash for my stocks and 401K when it dropped like a rock.

A recession brings about a 20% drop in the Dow. I figured that means I didn't want to get back in until it hit 11,500 as a signal of being near the bottom. Just like I couldn't figure out the top before it happened, I can't figure out the bottom either. The credit crunch needs another 6 months for the mortgage/finance industry to sort out and stabilize.


My best pics were Florida Rock 80% (bought out by Vulcan Materials). Garmin 150% GRMN and Hansons 110%. There are about 15 other losers in the mix that brought my overall average down to 36%. Lowes, Home Depot, Bed Bath and Beyond, Chicos, and Williams Sonoma name a few losers that seemed good at the time.


It seems backwards, but its not the winners, but how many losers you have that make the difference. I've been doing a lot of background reading on Buffet, Graham, and Dodd. I'm reading George Soros now.


After not being able to predict the crash, I spent $1000 of my profit on an Investools Stock Course. I learned what I was missing is the purchasing stock only makes you money when the market goes up. Buffet says we'll have 12 years of sideways markets before the next bull rally. I saw the crash coming, but didn't know how to profit by it. Now I've been reading up on Options. That's the trick to making money in all market directions. However, there is a big penalty for errors. :) It sounds good on paper, I have yet to click a trade as the power is intimidating.


The investools Options course is $5000 and I'm not ready for that kind of investment yet. I like to read books for free from the library to get a broad prospective and it works as an antidote to lure of "get rich quick" promises of all the books.


Knowing how to research and understand the value of a company is a great starting point. Its the 101 of investing and it takes time for all this to soak in. I'm not a math person, but I'm finally staring to get it. My advice is don't rush and just let it soak in.


The only other thing I can say is that all my big losses, started as little losses. I've learned to love small losses and get out at the first sign of trouble. I can always get back in. Trading commissions are so small now compared to what they used to be.

Another good rule I wish I knew from the start was the 10% rule. Don't invest more that 10% of your available assests in any one trade. I was always guessing how much to purchase?


Save all our paperwork and keep your transactions logged somewhere online. Taxes are a be-yatch! I hope you use an accountant, I scared Andrea off from doing ours this year.


The most encouraging part is that no one is going to take as good of care of my money as me. Mutual funds are a scam, you'll probably want to get in a fight at your next 401K meeting as they serve up the BS. The difference instead of thinking its BS and just not opening your statements, you'll know its BS and learn how to minimize the downside and look for the upside potential. Most importantly you won't be afraid to let it sit in cash (or low yield bond fund) until a better opportunity presents itself.


Currently I'm about 20% invested 80% cash.


I'm holding GRMN, HANS, PNRA, and MMM right now. My next move is to sell covered calls on the first three as soon as I can figure out how to do it on the Bank of America website.


Keep in touch, I've only a few other people I speak with about investing and I'd love to get a club or group going. Discussing what is going on is the best way to keep it interesting. Once you put trades it, you'll watch them like a hawk. When I got out in cash, I lost interest and had to force myself to get back in the habit.


What's your first move?