2. Diversify - we are now living in a world of constant change. Countries, currencies and companies come and go. And we are more interconnected than ever before. The unexpected regularly happens - Lloyds of London, Enron, Equitable Life. Just accept that something very bad can happen (COVID-19?) and there are factors that you are unaware of. By the way, most investors probably don't know much about the backgrounds and abilities of the managers of listed companies. Even if those people are extremely competent they may be taken by surprise. Accept that you are not acting on perfect knowledge. And, so, spread your money around. Diversification is key. And do not get over-exposed to any one stock. You do not have full knowledge of the company or the people running it or the market in which it operates. And they are all fluid. Be prepared to lose everything that you invest in a stock. That’s a 100% loss. The unexpected happens - so-called "Black Swan" events. If you cannot accept a 100% loss then you are probably over-exposed. This is extremely important.

3. Leave complex/leveraged products to specialists. There is too much that can go wrong. Do not get leveraged up. Don’t go near leverage. Stake what you are prepared to lose (By lose, I mean 100%) and no more. In the event of a real market meltdown, stop-losses may not work and you could find yourself in a legal minefield. Just as a slight aside, if you do get leveraged up and the broker goes bust, you lose what’s owing to you but whatever is owed to the broker is still owed!

4. Do not average down unless you are confident that you know more than the market. Especially true in resource stocks. Ask a simple question: Has the situation changed and do I have proof to support my answer? Something not in the public domain could have spooked insiders. Averaging-down in loss-making stocks, in my opinion, is a disastrous strategy.

5. Don’t bother with short-term trading. Take a long-term time frame. Leave short-term trading to professionals (Insiders) who know far more about the mechanics of the market. And take any claims made by traders via social media with a large pinch of salt.

6. Avoid companies that you do not understand or you cannot get your head around. For most investors, this rules out biotech.

7. Think very carefully before buying into micro-cap stocks - they may let you in but when it comes to selling you could have serious problems because of a lack of liquidity ("Lobster pots"). It may prove difficult to sell a relatively large line of stock. And remember, elephants don’t jump but they can crush ants - small companies may always remain small. While large companies could have a global market and their size needs to be viewed in light of that. Don’t assume that small companies will get bigger and large companies cannot grow.

8. If you refer to bulletin boards or social media understand how they work. They can offer useful information. But be aware. Some posters may be paid to promote certain companies. And they know what they are doing. Pressing psychological and emotional buttons to get the required responses and even working in collusion and to a script. You will probably never meet any of them and you have no idea about their motivations or claims. So use some common sense. Generally, avoid companies where there are many posters. And look at posting histories. Verify any claims or comments that may influence your investing decisions. And filter out the noise - look for verifiable research that can help you form a judgement.

9. Avoid companies that habitually raise capital - equity and debt. In a credit crunch, they are likely to go to the wall. Why should a successful enterprise require a constant injection of funds? Take a look at the last five years' cash flow statements. It will show how much has been raised and where the money has gone.

10. Avoid companies that change nominated advisers too frequently. Nomads may be desperate for business but they still have some standards.

11. Get into the habit of looking closely at the balance sheet. Can the company survive a slump in sales? Will it need to raise funds? Look carefully at debtors - growth, quality and trends. How real are the company’s sales? Is the increase in debtors proportionate to the increase in sales. It’s also worth looking at the company’s creditors. Stalling payments may flatter the cash balance. Cash really is king for most companies. However, the figure in the balance sheet is at a point in time. Take a look at the cash flow statement. Does the interest received figure broadly tally with the cash balance figure? Is the figure unencumbered? Avoid companies that are over-leveraged. Companies can scale down in bad times. But debt repayments are pretty binary. And lenders will probably have a higher priority in the event of the company going bust than shareholders. Unfortunately, as a leading accountant recently pointed out to a British parliamentary committee, it’s not the job of auditors to identify fraud. Which is why I suggest referring back to point 2.

12. Directors may have skin in the game but how much did they pay for their stock? This could be very important if the business is subject to a takeover offer. Incidentally, do not buy a stock on the assumption that the company will be sold (You don’t know when it will happen and at what price). The Directors’ idea of a “Multi-bagger” could be very different from yours. And take a close look at the Board’s remuneration (Remember, they get expenses as well). It might be a gravy train - don't assume that they are working a full week on company business. Be wary of managements that break their promises - lack of delivery. Take a look at past annual reports and go straight to the Chairman’s or CEO’s statement. Have their objectives subsequently been delivered?

13. Don’t assume that institutional shareholders know any more about the company than you. Do your own research (DYOR). Attend AGMs, presentations etc. Contact the company. But be aware that the Directors are generally excellent presenters. Get different angles on the business. I think that it’s fair to say that many fund managers are not that entrepreneurial and could be in the pockets of managers. So do not expect them to ask difficult questions. They may also be stuck. They simply cannot get out because of a lack of liquidity in the stock.

14. Use a variety of platforms - brokers can go bust and reimbursement through a compensation programme could be onerous. Do not necessarily go for the cheapest broker.

15. Get real - compound growth is incredibly powerful. The genuine “Multi-bagger” in, say, one year is very rare. Be realistic. Over a fifty-year period, Warren Buffett’s flagship fund averaged a compounded annual total return of around 19%. If you want to live in a short-term “Multi-bagger” world then you could be setting yourself up for some dramatic losses. Coming back from such losses could be very difficult.  

16. Seriously consider taking an opening (Small) position in a company that you wish to invest in. Purely an opinion, but having a financial interest in a business will probably make an investor more attentive as to how the company performs. With a greater understanding of the business, you will probably be in a better position to make a judgement on its prospects.

Incidentally, it may be useful to view the above in light of interest rates held at incredibly low levels for an extended period and a world awash with debt. In my opinion that has created many asset bubbles. In some areas, effective price discovery appears to have been lost. Judging where stock markets would be in more "Normal" times is virtually impossible. While currency debasements (Including "Quantitative Easing") appear to have started from economic weakness and have tended to exasperate underlying problems. From the Roman Emperor Nero to King Henry VIII. And more recently Venezuela. Viewed across time and space, simply printing money to stave off an economic collapse has not worked. Maybe this time will be different. But it's certainly worth considering.