Michel Pireu Columnist

In The Harriman House Book of Investing Rules, Richard Driehaus points to a few investment paradigms that might be best avoided. One of the best known of these is buy low, sell high. "But I believe more money can be made by buying high and selling even higher," says Driehaus. "I try to buy stocks that have already had good price moves, that are often making new highs and that have positive relative strength. Obviously, the risk is that I’m buying near the top. But I would rather be invested in a stock that is increasing in price and take the risk that it may begin to decline than invest in a stock that is already in decline and try to guess when it will turn around." Other paradigms that he says are best ignored: Buy and hold good companies. "Remember that things are always changing and yesterday’s good company may not be today’s great investment. Don’t try to hit home runs. "I couldn’t disagree more. I believe you make the most money hitting home runs. Although you also need to avo...

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