3 ideas
Hold at least ten securities across five fields, reappraise every holding at least every six months, and cap poorly documented securities at a quarter of the fund. Cut losses quickly while letting profits run, borrow only when prices are low, and shift half the fund into short-term bonds when stocks are high, money rates are rising, and business is booming.
Tips and inside information systematically hurt the outsider. They arrive late and carry the teller's interests, and they replace verification with trust, so they should be avoided like the pestilence. The speculator's edge comes only from gathering and checking primary facts about a company himself, such as its balance sheet, earnings, and competitive position.
Most market participants can find sound value but cannot wait for it to be recognized, so they churn positions and pay for their restlessness. A buyer willing to hold a well-chosen security through dull or declining stretches captures the gains that impatient traders forfeit. Carret treats temperament, not analytical brilliance, as the binding constraint on returns.