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7 Golden Rules for Investing Prolific American stock picker Louis Ehrenkrantz was known for his ability to predict social & political developments - and identify companies that would benefit most from these events
A thread of his 7 golden investing rules
Rule 
: Develop a large appetite for reading
- It will hone your instincts for finding successful companies
Rule
: Donât over-diversify
- Ehrenkrantz states that 10 stocks in at least 3 sectors is enough for the average investor
: Develop a large appetite for reading- It will hone your instincts for finding successful companies
Rule
: Donât over-diversify- Ehrenkrantz states that 10 stocks in at least 3 sectors is enough for the average investor
Rule 
: Stick with your winners and sell your losers
- Do not automatically sell when the stock hits a target price but continue to hold as long as it performs well and has good prospects for the future
: Stick with your winners and sell your losers- Do not automatically sell when the stock hits a target price but continue to hold as long as it performs well and has good prospects for the future
Rule 
: Look for top quality out of favour companies
- Companies that produce an array of high quality products/ services or in the process of bringing high quality products/ services to market
( $TDOC and $FSLY in H2 2020 spring to mind here)
: Look for top quality out of favour companies- Companies that produce an array of high quality products/ services or in the process of bringing high quality products/ services to market
( $TDOC and $FSLY in H2 2020 spring to mind here)
Rule 
: Donât worry about earnings if a company makes a high quality product or provides a high quality service
- Strong earnings growth will follow as high quality leads to high demand which leads to high sales
: Donât worry about earnings if a company makes a high quality product or provides a high quality service- Strong earnings growth will follow as high quality leads to high demand which leads to high sales
Rule 
: Donât tinker with your portfolio
- Ehrenkrantz recommends to check your portfolioâs performance once of twice a year, as long term focus is the goal
(This would be extremely tough IMO but would promote longtermism)
: Donât tinker with your portfolio - Ehrenkrantz recommends to check your portfolioâs performance once of twice a year, as long term focus is the goal
(This would be extremely tough IMO but would promote longtermism)
Rule 
: Donât be afraid to hold cash
- Holding some cash allows you to be prepared to purchase stocks with beaten down prices after a correction
: Donât be afraid to hold cash- Holding some cash allows you to be prepared to purchase stocks with beaten down prices after a correction
These rules are not complicated in theory, but in practice some of us fall short in implementation.
For me the key themes of Ehrenkrantzâ golden rules are
1. Patience
2. Conviction
For me the key themes of Ehrenkrantzâ golden rules are
1. Patience
2. Conviction
I will try to tweet one thread per week (every weekend) on legendary investors and some of their insights
Hope you enjoyed the thread.
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Hope you enjoyed the thread.
If so, please feel free to share the thread or RT. Your support is greatly appreciated
