Here are some pointers from this section: • Understand the nature of the companies you own and the specific reasons for holding the stock. (“It is re… - Peter Lynch

Understand the nature of the companies you own and the specific reasons for holding the stock. (“It is really going up!” doesn’t count.)

By putting your stocks into categories you’ll have a better idea of what to expect from them.

One obvious sell signal is that inventories are building up and the company can’t get rid of them, which means lower prices and lower profits down the road. I always pay attention to rising inventories. When the parking lot is full of ingots, it’s certainly time to sell the cyclical. In fact, you may be a little late.

The offspring of immigrant factory workers had a chance to go to college and become doctors, lawyers, executives, and even owners of the very companies where their parents and grandparents worked long hours for low pay.

It’s best to divide your money among three or four types of stock funds (growth, value, emerging growth, etc.) so you’ll always have some money invested in the most profitable sector of the market.