stock market rules

Axioms relating to the stock market have probably been around as long as
stock trading. One of the oldest known axioms relates to selling short: He
who sells what isn’t hisen must buy it back or go to prison. The continuous
buying and selling in the stock market attracts clever sayings and words of
wisdom about what to do or what not to do in a particular situation. Always
remember that buying or selling stock involves two differences of opinion.
The buyers believe that the price will rise and the sellers believe the price is
going nowhere or down. How can axioms about trading stock be helpful?
They are based on real stock market experience, and experience is often the
seasoning that makes investors richer or poorer.
Many old axioms are still true today, while others that were once true
have changed. “Buy on Monday, Sell on Friday” (Chapter 25) is a wellknown
principle among investors, but many aren’t aware that the patter
has changed. Statistically, the axiom is not as good a strategy as it was
prior to 1990.
“Good Companies Buy Their Own Stock” (Chapter 3) might be
good for the company, but is it always good for the investor?
Bellwethers—stocks that turn before the rest of the market—have been
kicked around for decades. Part of the problem with bellwethers is their
tendency to be inconsistent, turning ahead of the market sometimes or
with and after the market other times, as shown in Chapter 5, “Watch the
Bellwethers.”… …