10 Reasons Why Most Stock Investors Fail

1. Failing to appreciate what common stocks are
   Although it's easy to forget sometimes, a share is not a lottery ticket... it's part-ownership of a business.
   - Peter Lynch
   Behind every stock is a company. Find out what it's doing.
   - Peter Lynch
2. Not studying the business before investing in the stock
   Know what you own, and know why you own it.
   - Peter Lynch
   If you don't study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
   - Peter Lynch
3. Failing to invest or stay invested in a good stock during times of crisis
   Unless you can watch your stock holding decline by 50 per cent without becoming panic-stricken, you should not be in the stock market.
   - Warren Buffett
   Cash combined with courage in a time of crisis is priceless.
   - Warren Buffett
4. Not thinking long term and not being disciplined and patient
   If you are not willing to own a stock for 10 years, do not even think about owning it for 10 minutes.
   - Warren Buffett
   Successful Investing takes time, discipline and patience. No matter how great the talent or effort, some things just take time: You can't produce a baby in one month by getting nine women pregnant.
   - Warren Buffett
5. Indulging in derivatives and stock trading
   Deivatives are financial weapons of mass destruction.
   - Warren Buffett
   As in roulette, same is true of the stock trader, who will find that the expense of trading weights the dice heavily against him.
   - Benjamin Graham
6. Paying too much for the stock
   If you are shopping for common stocks, choose them the way you would buy groceries, not the way you would buy perfume.
   - Benjamin Graham
   Confronted with a challenge to distill the secret of sound investment into three words, we venture the motto, Margin of Safety.
   - Benjamin Graham
7. Blindly following the crowd
   We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.
   - Warren Buffett
   Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway.
   - Warren Buffett
8. Making exceptions to sound investing principles as per the latest fad
   The individual investor should act consistently as an investor and not as a speculator.
   - Benjamin Graham
   With every new wave of optimism or pessimism, we are ready to abandon history and time-tested principles; but we cling tenaciously and unquestioningly to our prejudices.
   - Benjamin Graham
9. Underestimating your potential as an investor
   Twenty years in this business convince me that any normal person using the customary three percent of the brain can pick stocks just as well, if not better, than the average Wall Street expert.
   - Peter Lynch
   If you have more than 120 or 130 I.Q. points, you can afford to give the rest away. You don't need extraordinary intelligence to succeed as an investor.
   - Warren Buffett
10. Last but not the least: Making costly mistakes
    It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.
    - Charlie Munger
    Rule #1: Never lose money; Rule #2: Never forget Rule #1.
    - Warren Buffett