 Good day fellow investors, now I always keep a set of rules that I read and reread because I feel that when you have a set of rules it can protect you from making stupid stupid things which are usually the most costly thing that can happen on a stock market and in investing when you do stupid things. Munger says that the best thing that Buffett and he did during their 60 year careers was that they tried to avoid being stupid. However they have been stupid but less than other people. So in this video I want to discuss my 10 rules that I try to read constantly change over time but I try to read and keep in mind in order to avoid making stupid investing mistakes. So let's start with rule number one. Invest in businesses that have high earning sales. So I always try to look at businesses that give me a reward as an investor. I am at first an investor and I want to get the 12.5% return that I have as a target from the business so the price earnings ratio to where I invest should be at 8 for me to start investing. I know that's very low but if I look around the world I find such investments. It doesn't have to be now at 8 but the long term average has to be at 8. It can be a growth stocks that will grow into that price earnings ratio. It can be a cyclic cow that has a cape of 8 or something like that. However I want business earnings. That is my margin of safety when I invest. Number two. Be satisfied with finding 5 good stocks over a year and then invest in two of them or even one of them. There are so many stocks however if you spend a lot of time on research as I do then you can really really find excellent investing opportunities. And that's what I'm really wanting to put into my brain. When I have the money that's usually when you make mistakes like when I bought Teva I had money sitting there on the account doing nothing. I didn't want to expose myself too much into the other four stocks that I like then I thought ok it's a defensive stock. Oh let's play it, let's see it and I got burned immediately. So really focusing on buying just a few stocks per year really helps me in staying disciplined. If it's not good enough next, next, next, next, next and I could go on for 20 minutes on next in order to show you the importance of next. Don't buy until all your criteria are met. Buying just for fun leads to stupidity, stupid investments and losses. If you're not lucky but everything can happen. Number three. Before buying a stock imagine the worst case scenario. What's the worst worst worst that can happen to the stock, to the company and how would you go personally about it? I usually say ok what happens if that company goes bankrupt. What's the probability, can it go bankrupt, what's the margin of safety so first focus on risk and when the risk is low that even if whatever happens negatively is already priced in then it's a great, great, great buy. Four. Always keep a cash cushion. The more cash you have the more power you have. Cash is an option. Cash is an option to decide to be more flexible to do whatever you want. Buy more if stock prices fall. Have liquidity if you need it so it's always smart not to be fully invested. Just remember that Buffett has more than 100 billion in cash on his bank account now on Berkshires of course. Now six. Sell stocks. When the stock has reached there your target now it's not more the same stock than it was when it was a bargain because the risk of a stock is a function of its price. The higher the price the higher the risk. So when a stock hits a target I usually sell. I sold part of UPi and still have part the profits in it. I have made more than 100% there. So that's how I play it. I still think it's a bargain especially with the growth so in the next 3-4 years it can go higher. However, I have limited my exposure. I left the profits in so I can't lose on that practically. Nevertheless, if it goes even higher I might trim that position even more. So that's how I go. I always sell, take the profits and then look again for the 1-2 bargains that I want to get. Number 7 something that I am working on and I will keep on working because when I find a bargain I tend to put my position immediately because I know it's a bargain and I don't want to mess it. However, I have learned that even if something is a bargain it can become even a bigger bargain. So I have to buy in stages and I have set me a rule you buy so much when the bargain let's say price earnings ratio is 8 you buy so much of your portfolio. If the stock drops and the fundamentals stay the same and the story stays the same you buy larger parts of your portfolio and rebalance accordingly when the price recovers. This gives me some alpha, gives me something to do let's say I'm practically trading but I'm just managing risk so it's not trading. This is something I still have to work on I'm still developing the strategy so it's something to mitigate risk and perhaps even increase returns. Working on it it's work in progress as always but I have a clear theory about it might even make a video to show exactly how it goes. Number 8 keep a macro hedge. Nobody knows what will happen when it will happen so it's always smart to keep a macro hedge that will go the other way around if financial markets if currencies if stocks crash. For me the hedge are in the beginning gold miners as long as there is liquidity because if there will be a great crisis there will be nationalizations everything that I can later switch to gold hopefully. However I always have a hedge in my pocket small part of portfolio but I am let's say hedged. Number 9 very important don't trust the management always look for indicators outside the company independent research this way you have more perspective and you can see what will really affect the company if it is in line with what the management is doing even better and even better if the stock is cheap. Number 10 be sure to know your financial goals you will get to them. I'm a strong believer that in life you get what you expect so if you expect 3% returns per year you will find those investments if you expect 20% you will find those investments so it's just about what are you looking for and therefore you should really focus on your goals why what what you want from your investments because you will get there your mind will start thinking about how to get to those investments and you will find them so really think first about your goals don't invest go less because that's the quickest way to lose money. I hope you enjoyed my 10 rules comment add your own rules write them down it's always nice to see other people's rules share them let's create this a thread that people can come back and read rules take rules learn from others click like if you like the content subscribe thank you for watching and I'll see you in the next video.