---
type: "Topics"
locale: "en"
url: "https://longbridge.com/en/topics/100000000184883.md"
description: "Some basic lessons for new investors to live by: 1/ Ignore the crowd.  You make money by going against the consensus.2/ Always pick stocks where you feel you have a research edge.3/ You rarely go wrong investing in the company with the best product. 4/ Don’t listen to management.  They are paid to be bullish. 5/ Study competitors, suppliers, and customer behavior.  Be a product junkie.6/ Have in your mind what you think a stock is worth, which is different from price.7/ Be able to articulate in one sentence why you own a stock.8/ Develop specific downside scenarios that would cause you to sell the stock.9/ The highest quality of growth is unit growth, then pricing, then margin expansion, then cash reinvestment. 10/ Be wary of companies that grow by buying other companies.11/ Sell discipline is selling a stock once it hits your price target, or your investment thesis (why you bought it) changes.12/ Short stocks that have bad businesses, and not because they trade at high P/Es. 13/ Two big value creators are brand extension and TAM expansion stories.14/ High P/Es are a function of high future growth rates, and not the industry. 15/ When investing in growth stocks always look for a controversy (“fight”).16/ Buy stocks that can leverage key secular megatrends, and avoid those that will be hurt by them.17/ Always consider cannibalization of existing products when sizing up new product opportunities.18/ Be wary of “hockey stick” sales forecasts absent new products or expansion to new distribution channels. 19/ Stock buybacks are accretive if the E/P ratio exceeds the after tax cost of debt or return on cash.20/ Price cuts rarely add value since competitors usually match them."
datetime: "2025-08-08T19:37:19.000Z"
locales:
  - [en](https://longbridge.com/en/topics/100000000184883.md)
  - [zh-CN](https://longbridge.com/zh-CN/topics/100000000184883.md)
  - [zh-HK](https://longbridge.com/zh-HK/topics/100000000184883.md)
author: "[Gary Black Tracker](https://longbridge.com/en/profiles/17077344.md)"
generator: "portal-rs"
---

# Some basic lessons for new investors to live by: 1…


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> **Disclaimer: This article is for reference only and does not constitute any investment advice.**