1. Buy companies that have disciplined plans for achieving dramatic long-range profit growth and have inherent quailities making it difficult for newcomers to share in that growth.
2. Buy companies when they are out of favour.
3. Hold a stock until either (a) there has been a fundamentall change in its nature (e.g., big management changes), or (b) it has grown to a point where it no longer will be growing faster than economy as a whole.
4. De-emphasize the importance of dividends. (CW8888: We should be looking at both dividend and dividend payout ratio at the same time, and not just based on dividend alone. High dividend payout ratio will return high dividend yield. It is expected and nothing extraordinary about it. This is how market works in the long-run)
5. Recognise that making some mistakes is an inherent cost of investment. Taking small profits in good ......
