The Fribble
Thursday, March 27, 1997
The Ten Foolish Commandments
by MF Cormend
Throughout history, any civilization worth a hill of beans has developed a code upon which its very existence rests, a set of rules of conduct that serve as a central, guiding focus. From the ancient Babylonian Code of Hammurabi to the Bushido, honored by feudal Samurai warriors, a few basic principles can strengthen a culture and function to unite and simplify its maze of laws and customs.
Certainly the Motley Fool, while not yet reaching the heights of the Byzantine or Roman empires, has a culture of its own. However, an entire five-minute search through the dusty corners of Fooldom did not produce the elusive Foolish Code by which we can structure our investment lives. Sure, there are the 13 Steps to Investing Foolishly, but these are concerned more with the nuts and bolts of getting rich, rather than some highfalutin', all-encompassing, moral principles. Hey, we're looking for reverence here! So, without any input from the Brothers G. (and definitely without their approval), I propose my own set of Ten Foolish Commandments, which if followed diligently might just lead to a happier, more fulfilling, and definitely wealthier life. With apologies to Moses and David Letterman, here goes:
1. Thou shalt consider investing a long-term venture.
2. Thou shalt make investment decisions independently, based on one's own gathered information, and not rely solely on hearsay or the opinions of others.
3. Thou shalt not attempt to time the market.
4. Thou shalt hold thyself strictly accountable for one's results and diligently keep records of one's portfolio returns.
5. Thou shalt at all times compare one's investment results against appropriate market indices, rather than in absolute terms.
6. Thou shalt strive to minimize expenses when doing so will not compromise returns.
7. Thou shalt feel comfortable with one's level of risk in the market, and never invest money which one cannot afford to lose in the short-term.
8. Thou shalt seek investment approaches that are simple and straightforward over those that are complex and contrived; thou shalt never invest in anything one does not completely understand.
9. Thou shalt strive to achieve appropriate diversity in one's portfolio, but be aware that over-diversification is nearly as evil as under-diversification.
10. Thou shalt honor and respect the opinions of others, treat fellow investors courteously and, above all else, thou shalt not covet thy neighbor's returns (or wife, for that matter).
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