>• Don't try to shoot for big gains by finding the next Microsoft. Instead, focus on finding solid companies with shares selling at low valuations.
>• Understanding the market's history can help you avoid repeated pitfalls. If people try to convince you that "it really is different this time," ignore them.
• Don't fall into the all-too-frequent trap of assuming that a great product
translates into a high-quality company. Before you get swept away by ex
citing new technology or a nifty product, make sure you've checked out
the company's business model.
• Don't be afraid to use fear to your advantage. The best time to buy is
when everyone else is running away from a given asset class.
• Attempting to time the market is a fool's game. There's ample evidence
that the market can't be timed.
• The best way to reduce your investment risk is to pay careful attention to
valuation. Don't make the mistake of hoping that other investors will keep
paying higher prices, even if you're buying shares in a great company.
• Cash flow is the true measure of a company's financial performance, not
reported earnings per share.
