Fifteen favourite fallacies

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16. Conclusion

It is only human to look for reliable rules and simple formulae to resolve an intellectual challenge. The investor's search for easy answers is manifested in a range of proverbs, sayings and mantras that have been given authority by the mere force of repetition. Together, these sayings are the nearest thing to a body of education that many investors ever receive. And they are all the more dangerous for that.

The sayings are seldom correct. Many of them are either completely misguided, or plain wrong, or right only in certain circumstances. Treat them with too much reverence, and you could be heading for a fall. Recognise them for what they are - simplistic part truths - and you stand a chance of emerging unscathed.

You have now completed the course. To test your knowledge, take the Assessment test.

1. "Investing is just gambling anyway, so why not take a few chances?" 2. "You've got to speculate to accumulate" 3. "Growth always wins in the end/Value always wins in the end" 4. "Blue chips are best/Smaller companies are best" 5. "Penny shares are the best value for money" 6. "It's such a great company, I can't go wrong" 7. "But just look at the dividends" 8. "I've got to be in technology/biotechnology/telecoms etc" 9. "I missed that one, I'll catch the next one" 10. "Paper losses aren't real" 11. "I'll never go broke taking a profit" 12. "It can't possibly go any lower" 13. "It can't possibly go any higher" 14. I can't sell because of the tax bill 15. "This time it's different" 16. Conclusion

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